China Sells 117,672 Tons of Aluminum Ingot From State Reserves in Auction

China sold all the aluminum ingots it offered from the state reserve at below market prices, according to the result of a tender posted today on the website of the National Development and Reform Commission.

A total of 117,671 metric tons were sold at an average price of 15,395 yuan （$2,308） a ton through public auctions on Nov. 23-24, said the State Bureau of Material Reserve, which is a department of the commission. The highest price was 16,000 yuan and the lowest 15,150 yuan, it said.

This was the second auction of aluminum the agency offered this month, having previously sold 95,767 tons. China has already sold zinc, lead, sugar, cotton, corn, paper pulp, and magnesium, from state inventories this year in an effort to ease shortages and curb price gains.

“The result is in line with our expectation, and similar to the last tender,” Liang Lijuan, an analyst at Cofco Futures Co., said by phone from Beijing. “Whether there will be further sales depends on market prices.”

China authorities are easing power limits on aluminum producers, which may lead to plant restarts as early as next month, said Beijing-based analyst Wan Ling at CRU International Ltd. on Nov. 25. In Henan, the country’s largest aluminum producing region, conditions improved after Nov. 10, she said, adding the energy cuts could still trim the country’s output by 300,000 tons this year.

Aluminum traded on Changjiang, Shanghai’s largest nonferrous metals market, was quoted from 16,030 yuan to 16,070 yuan a ton when the tender was scheduled to take place, down from around 16,150 yuan at the beginning of this month.

The world’s largest consumer is estimated to have a 350,000 ton surplus this year, down from an earlier forecast of 800,000 tons, said Li Yang, an analyst at researcher Beijing Antaike Information Development Co., on Oct. 27.

Metal for delivery in three months traded on the London Metal Exchange gained 0.6 percent to $2,284 a ton at 2:08 p.m. in Shanghai. Aluminum on the Shanghai Futures Exchange gained 0.4 percent to 16,400 yuan a ton at the same time.

--Helen Sun. Editors: Richard Dobson, Matthew Oakley.