China will sell another 30,000 tonnes of copper, 90,000 tonnes of aluminium and 50,000 tonnes of zinc from its state reserves on July 29, the National Food and Strategic Reserves Administration said on Wednesday.
The auction marked the second sale by the world’s top metals consumer this month as the government aims to rein in skyrocketing commodity prices.
“The national reserves are sufficient, (we are) confident and capable to stabilise expectations and cool the market,” state media Xinhua cited an official from the reserve’s administration as saying.
Prices for the most-traded copper contract on the Shanghai Futures Exchange have gained 15.6% this year. Aluminium and zinc futures on the bourse have increased 23.2% and 7.1%, respectively.
“It is slightly less than the market expected but it should be priced in already as it’s pretty well flagged,” Anna Stablum, a commodities broker at Marex Spectron, said 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 noon (0100-0400 GMT) and 1 p.m. to 6 p.m. (0500-1000 GMT), the administration said in notices on its website.
China had sold 20,000 tonnes of copper, 50,000 tonnes of aluminium and 30,000 tonnes of zinc reserves on July 5 – the auction was originally planned for two days. More than 200 nonferrous fabricators attended the bidding, with transaction prices 3-9% lower than market prices that day.
“The market has strong willingness to buy and the first sale was kind of a competition of speed. Companies that won the bidding would surely have benefited,” said He Xiaohui, analyst with state-backed research house Antaike.
The release of metals reserves is expected to last until the end of the year, He added.
China produced 837,000 tonnes of copper, 3.29 million tonnes of copper and 567,000 tonnes of zinc in June, official data showed.
Source: Reuters (Reporting by Shivani Singh and Min Zhang in Beijing and Mai Nguyen in Hanoi; Editing by Toby Chopra and Louise Heavens)