Copper futures prices last week closed at a two-month low after a double shock from Beijing. China’s pledge to release its national stockpile may signal Beijing’s commitment to price curbs, while also warning state-owned enterprises to reduce their participation in international commodity markets. But even if the strategic reserve is sold on the market, many do not believe the price will fall for long enough.

Copper prices lost hot momentum when China announced state reserves. Citigroup analyst Tracy Liao said: “We don’t think the commodity rally is over. China’s measures are aimed at preventing expectations and speculation, not just solving the problems of supply-demand imbalance. As reserves decrease, it is more likely that investors will buy as soon as prices fall, so commodity prices will increase again in the coming months.”

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