China began auctioning 150,000 tonnes of industrial metal, the third sale from its state reserves this year aimed at easing the pressure on businesses from high commodity prices.
Metals in the auctions that took place last week are being sold off in small batches, usually 100-250 tons. Sales information completed early in the bidding session, which is expected to run until 1000 GMT.
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China is offering processors and manufacturers the opportunity to bid for 30,000 tons of copper, 70,000 tons of aluminum and 50,000 tons of zinc.
The latest round brings the total amount of metals announced by the National Food and Strategic Reserve over the past two months to 420,000 tonnes. Before the first auctions in early July, China had not held a public sale of its state metal reserves in more than a decade.
During Monday’s top-level meeting, Chinese President Xi Jinping stressed the importance of state reserve management and said the country would build a unified strategic and emergency reserve system. .
Amid easing global liquidity, post-pandemic demand and supply-side disruptions, prices of many key commodities – such as metals and coal – hit record highs in 2021, depressing reduce factory activity in the world’s second-largest economy.
China has marketed several million tons of coal reserves this year and auctioned hundreds of thousands of tons of corn reserves to reduce high prices.
At the same time, to keep hog prices down and help farmers reduce losses, they also bought tens of thousands of tons of domestically produced pork into the state reserve.
The most traded aluminum (SAFcv1), copper (SCFcv1) and zinc (SZNcv1) contracts on the Shanghai Commodity Futures Exchange trading today (September 1) all opened lower and fell around 0.6%.
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