The Chinese authorities promised to start selling state reserves of industrial metals. Beijing thus came up with the way to reduce its production, writes Financial Times.
National Food Office and Strategic Reserves of the country reported that it was ready to offer the market for its stocks of copper, aluminum and zinc, thus making them accessible to local producers. This step was followed against the background of the rise in price of raw materials, which, in turn, led to a record height of vacation prices since 2008 and jeopardized the profit of industrial enterprises.
Metals have made a noticeable contribution to the global price increase in raw materials, which was initially caused by the rapid economic recovery in China after a pandemic and later supported by other large economies. Copper that is widely used in a wide variety of spheres, last month more expensive before a record level in more than $ 10,500 per ton.
Officially, the volume of state stocks of metal China does not disclose, but, by assumptions of analysts, Beijing could accumulate 500 thousand tons of copper, one and a half million tons of aluminum and up to 700 thousand tons of zinc. The scale of consumption can be represented on the basis of the volume of copper used, which in China is estimated at 15 million tons.
At the same time, the ambitions of the country that puts the task to eliminate carbon emissions by 2060 will require reduce and produce metals, which can create a threat to a potential deficit and lead to further increase in prices. Anxiety it causes and because the country is a major exporter of metals and the most significant consumer and producer of raw materials in the world.
According to the results of the first quarter of 2021, the Chinese economy grew into a record 18.3 percent. However, further recovery, according to experts, can prevent weak consumption against the background of the growth of production costs. Due to the rise in price of raw materials, the price index of manufacturers (PPI) of China is an indicator of price changes for goods and services at the wholesale level – in May rose to a record for almost 13 years.