China’s state reserves administration will not auction off any of its metal stockpiles this month due to a recent spike in coronavirus cases in the country, two Chinese industry consultancies said on Thursday.
The National Food and Strategic Reserves Administration last month sold a total of 270,000 tonnes of copper, zinc and aluminium in two rounds of auctions. The rare release of state inventories is designed to cool high commodity prices, which have driven up costs for China’s manufacturers.
Another round of sales was anticipated at the end of this month, but the planned release has been suspended due to the pandemic, aluminium consultancy Aladdiny and Shanghai Metal Exchange Market (SHMET) said, without identifying their sources.
The national reserves administration did not immediately respond to a faxed request for comment.
China, the world’s biggest metals consumer, has reported 1,258 local confirmed coronavirus cases since the start of the current outbreak in Nanjing on July 20, most of which have been of the highly infectious Delta variant.
Only five new cases were recorded on Aug. 18, however.
It was not immediately clear exactly why the pandemic would force a cancellation of the auctions. The bidding is held online, although participants do have the opportunity to inspect the metal in warehouses beforehand.
Aladdiny added that it understood the pandemic might only be one reason behind the suspension, without elaborating.
Recent efforts to control the spread of the virus in China have led to disruption at major ports, stoppages at some factories and business, and even downgrades of the country’s gross domestic product estimates for the third quarter by some private-sector economists.
Source: Reuters (Reporting by Tom Daly; Additional reporting by Ryan Woo and Beijing Newsroom; Editing by David Holmes)