The prices for the most traded copper contract on the Shanghai Futures Exchange are up 15.6% this year. Aluminum and zinc futures on the exchange are up 23.2% and 7.1%, respectively.BEIJING: China will sell another 30,000 tons of copper, 90,000 tons of aluminum and 50,000 tons of zinc from its state reserves on July 29, the National Food and Strategic Reserves Administration said on Wednesday.
The auction was the second sale of the world’s leading metal consumer this month as the government seeks to contain skyrocketing commodity prices.
“National reserves are sufficient, (we are) confident and able to stabilize expectations and cool the market,” Xinhua state press quoted an official from the reserve administration as saying.
The prices for the most traded copper contract on the Shanghai Futures Exchange are up 15.6% this year. Aluminum and zinc futures on the exchange are up 23.2% and 7.1%, respectively.
“It’s a little less than the market expected, but it should already be priced in as it’s pretty well labeled,” said Anna Stablum, a commodities broker at Marex Spectron, of the auction.
The second sales from reserves will again take place on online platforms operated by China Minmetals Corp and Norinco from 9 a.m. to 12 p.m. (0100-0400 GMT) and 1:00 p.m. to 6:00 p.m. (0500-1000 GMT) shared the government in notices on their website.
On July 5, China had sold 20,000 tons of copper, 50,000 tons of aluminum and 30,000 tons of zinc reserves – the auction was originally scheduled for two days. More than 200 non-ferrous manufacturers took part in the tender, with transaction prices 3-9% below the market prices on that day.
“The market is very willing to buy and the first sale was a kind of speed competition. Companies that won the tender would certainly have benefited,” said He Xiaohui, an analyst at the state-sponsored market research firm Antaike.
The release of metal reserves is expected to continue through the end of the year, he added.
China produced 837,000 tons of copper, 3.29 million tons of copper and 567,000 tons of zinc in June, official data showed.
China will step up monitoring of commodity prices and continue to release copper, aluminum and zinc in batches from its state reserves, the National Development and Reform Commission (NDRC) said on Monday.