HONG KONG (Reuters) - Six large Chinese aluminum producers in China are considering forming a joint venture company that will handle primary aluminum stockpiling, a report by state-backed research firm Antaike said on Tuesday.
The six companies — four state-owned firms and two private enterprises — include Aluminium Corp of China (Chinalco), State Power Investment Corporation, Yunnan Aluminium, Jiugang group, Jinjiang group and Weiqiao Aluminium & Electricity, Antaike said.
The amount that the joint venture company will stockpile has not been decided, according to the report.
An aluminum stockpiling plan has been discussed over the past few weeks after aluminum prices fell to multi-year lows in the second half of last year, and is likely to be funded by commercial loans, sources have said. The stockpiling amount is expected to be between one and two million tonnes.
The JV group may not need to stockpile as much as anticipated as production cuts currently in place are reducing supply, said Xu Hongping, an analyst at China Merchants Futures.
“If they stockpile 500,000 tonnes in the first half of this year, the Chinese market may have a supply deficit,” she said.
A spokeswoman for Weiqiao’s Hong Kong listed unit, China Hongqiao Group Limited declined to comment. Telephone calls to spokespeople at Chinalco’s listed unit Chalco and Yunnan Aluminium’s Shenzhen-listed unit during office hours were not answered.
China is the world’s top producer and consumer of primary aluminum used in items from airplanes and cars to window frames and soda cans.
Reporting by Polly Yam; Editing by Christian Schmollinger