China to Release Metal Reserves in Effort to Tame Commodities Rally
Stockpiling body said it plans to boost supplies of copper, aluminum, zinc in batches
SINGAPORE—China plans to release national reserves of major industrial metals in an effort to rein in surging commodities prices fueled by a resumption of global economic activity.
The state stockpiling body, China’s National Food and Strategic Reserves Administration, said Wednesday that it plans to release copper, aluminum, zinc and other national reserves in batches in the near future to ensure the supply and price stability of bulk commodities.
Speculation that Chinese authorities would make such a move had pushed copper prices to an eight-week low on Tuesday, and investors worry Beijing may soon launch a broader push to temper rising prices.
The reserves will be released to nonferrous-metal processing and manufacturing companies via a public bidding process, the government agency said.
Beijing’s move came after Chinese officials in recent weeks repeatedly said industrial metals’ red-hot rally this year has gone too far. The State Council, China’s cabinet, last month said it would take steps to ensure adequate supply and stable prices for commodities, and regulators had previously warned industry representatives to take a zero-tolerance approach to market manipulation or hoarding of metals.
The benchmark three-month copper forward contract on the London Metal Exchange reversed earlier gains following China’s announcement, falling 0.15% to $9,555 a metric ton on Wednesday after declining about 4% on Tuesday.
https://www.wsj.com/articles/china-to-release-metal-reserves-in-effort-to-tame-commodities-rally-11623825424