Metal prices fall as China says it will release state stockpiles in effort to control a soaring commodities rally
Metal prices fall as China says it will release state stockpiles in effort to control a soaring commodities rally.|..||
- Metals prices fell early on Wednesday before paring losses as China ramped up its efforts to rein in soaring commodity prices.
- The country said it will release state stockpiles of copper, aluminum, and zinc. The move could boost short-term supply and push down prices.
- Prices of most metals were trading higher Wednesday afternoon, but many, like Copper, have come down in the last week.
Most metal prices in London and Shanghai fell early Wednesday before paring back losses as China ramped up its campaign to rein in commodity prices that have hit a 13-year highs.
China's National Food and Strategic Reserves Administration said it will release state stockpiles of metals including copper, aluminum, and zinc, the agency said in a statement cited by Bloomberg. The country hasn't released state reserves in years, and the move is expected to boost short-term supply and weigh on prices.
The stockpile release is the latest move out of Beijing to try and clamp down on soaring commodity prices, including a 67% increase in copper over the past year. Last month, a government agency in China said the country will show "zero tolerance" for monopoly behavior and hoarding and will increase law enforcement inspections. The agency said "excessive speculation" had disrupted the production in commodities and contributed to price increases.
According to Bloomberg data, copper and zinc dipped in London after the Wednesday announcement from China. However, China's buying power over metals doesn't necessarily mean it will be able to tame global prices.
As of Wednesday 10:45 a.m ET, Aluminum was up 0.9% and Zinc gained 0.38%. Copper gained the most, jumping 1.23%, but the metal is down 3.11% week-on-week.
