ANL 12.54 Decreased By ▼ -1.01 (-7.45%)
ASC 12.70 Decreased By ▼ -0.62 (-4.65%)
ASL 13.46 Decreased By ▼ -0.56 (-3.99%)
BOP 8.38 Increased By ▲ 0.02 (0.24%)
BYCO 5.96 Decreased By ▼ -0.18 (-2.93%)
FCCL 17.08 Decreased By ▼ -0.53 (-3.01%)
FFBL 24.05 Decreased By ▼ -0.85 (-3.41%)
FFL 9.97 Decreased By ▼ -0.28 (-2.73%)
FNEL 9.25 Decreased By ▼ -0.55 (-5.61%)
GGGL 14.00 Decreased By ▼ -1.30 (-8.5%)
GGL 27.05 Decreased By ▼ -2.45 (-8.31%)
HUMNL 5.73 Decreased By ▼ -0.17 (-2.88%)
JSCL 15.00 Decreased By ▼ -1.00 (-6.25%)
KAPCO 31.60 Decreased By ▼ -0.45 (-1.4%)
KEL 3.22 Increased By ▲ 0.05 (1.58%)
MDTL 2.09 Decreased By ▼ -0.12 (-5.43%)
MLCF 32.75 Decreased By ▼ -1.64 (-4.77%)
NETSOL 90.21 Decreased By ▼ -5.29 (-5.54%)
PACE 4.10 Decreased By ▼ -0.15 (-3.53%)
PAEL 20.51 Decreased By ▼ -0.92 (-4.29%)
PIBTL 7.25 Decreased By ▼ -0.35 (-4.61%)
POWER 6.39 Decreased By ▼ -0.21 (-3.18%)
PRL 11.95 Decreased By ▼ -0.74 (-5.83%)
PTC 8.80 Increased By ▲ 0.05 (0.57%)
SILK 1.17 Decreased By ▼ -0.08 (-6.4%)
SNGP 37.70 Decreased By ▼ -0.98 (-2.53%)
TELE 14.85 Decreased By ▼ -1.03 (-6.49%)
TRG 77.68 Decreased By ▼ -4.05 (-4.96%)
UNITY 22.90 Decreased By ▼ -0.80 (-3.38%)
WTL 2.03 Decreased By ▼ -0.02 (-0.98%)
BR100 4,381 Decreased By ▼ -20.35 (-0.46%)
BR30 16,863 Decreased By ▼ -630.48 (-3.6%)
KSE100 43,233 Decreased By ▼ -1.32 (-0%)
KSE30 16,718 Increased By ▲ 20.28 (0.12%)

Coronavirus
LOW Source: covid.gov.pk
Pakistan Deaths
28,767
624hr
Pakistan Cases
1,286,825
37224hr
0.82% positivity
Sindh
476,674
Punjab
443,453
Balochistan
33,506
Islamabad
107,887
KPK
180,316

BEIJING/HANOI: China announced plans on Wednesday to release industrial metals from its national reserves to curb commodity prices in what some analysts said could be the first such move in a decade by the world’s top consumer of metals.

The National Food and Strategic Reserves Administration said on its website it would release copper, aluminium and zinc in batches to nonferrous processing and manufacturing firms “in the near future” via public auction.

The notice came as Beijing struggles to cool a surge in metal prices this year fuelled by a post-pandemic economic recovery, ample global liquidity and speculative buying that has dented manufacturers’ margins.

China’s May factory gate prices rose at their fastest annual pace in over 12 years due to surging commodity prices, cutting into firms’ profit margins and highlighting global price pressures.

As speculation swirled about such a move before it was confirmed by the government, Citi said in a note on Monday that it could be part of “efforts to crack down on commodity price hikes by managing market expectations and deterring speculators, more than resolving any material physical shortages.”

Citi said the last reported strategic stocks release in China - which did not include copper - was in November 2010. State research house Antaike made parallels between the announcement and the release in 2010.

Most base metals were trading sharply lower in the Asian afternoon session on Wednesday.

Benchmark London copper hit a record high of $10,747.50 a tonne in May, having risen more than 60percent since March last year when the coronavirus destroyed demand. Shanghai aluminium touched its highest since 2010 in May, while zinc jumped to its highest since 2007.

“The Chinese authorities are trying to help support the margins at (their) manufacturing industry as they have found it hard to transfer these costs to the end-users,” said commodities broker Anna Stablum at Marex Spectron.

The statement by the administration did not provide details on quantities of metal to be sold, the auction process or which manufacturers will be allowed to bid.

Citi estimates China’s state reserves currently stand at 2 million tonnes for copper, 800,000 tonnes for aluminium and 350,000 tonnes for zinc, based on past purchase and sales records.

“Our base case is for total volumes of ... aluminium and zinc selling to be around 2percent of China’s annual demand, i.e. around 770,000 tonnes of aluminium and 140,000 tonnes of zinc, and for copper volumes to be minimal,” it added.

Analysts and traders believe metals markets have already priced in some sales from China’s reserves.

“However, we still don’t have any information about size of these sales and it will definitely continue to weigh on these markets,” Stablum added.—Reuters

We love hearing your feedback, please help us improve by answering these few survey questions

Comments

Comments are closed.