SHFE to Approve More Warehouses for Aluminum Delivery, Rumor Says

SHANGHAI, Mar. 1 (SMM) – Rumor is flying that the SHFE will approve more warehouses for aluminum ingot delivery this year. Will the move, should it be true, give a boost to aluminum consumption? 

The answer is simply no, SMM aluminum analyst Liu Xiaolei said. 

Precondition for establishment of warehouse is there is consumption in the local area, not the other way around, Liu explained. To say the least, it costs a lot to build aluminum processing plants, Liu added. 

According to the rumor, delivery warehouses will be chosen from Henan’s Gongyi, Shandong’s Linyi, Liaoning’s Shenyang, Tianjin and Chongqing. 

Among these five regions, Gongyi, Linyi and Chongqing are close to consumption hubs, especially Gongyi and Linyi, where there a large number of aluminum processors. The number of aluminum processors in Tianjin and Shenyang, however, are relatively small.  

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