SHANGHAI, Jul 19 (SMM) - At the July routine press conference held by the National Development and Reform Commission (NDRC) on July 19, a reporter asked questions about the effect of the first batch of the release of copper, aluminium, and zinc reserves.
Wan Jinsong, Director of the NDRC Price Department, replied:
Since mid-to-late May, the commission has thoroughly implemented the deployment of the executive meeting of the State Council, closely followed and monitored the price trends of bulk commodities in conjunction with relevant departments, took multiple measures, and continued to exert efforts. The commission jointly interviewed key enterprises and industry associations such as iron ore, steel, copper, aluminium, etc., conducted joint investigations and special investigations in relevant trading centres and key enterprises many times, urged enterprises to operate in compliance with laws and regulations, and continued to strengthen the linkage of the spot market supervision. So far, the first batch release of the national reserves has achieved initial results.
The prices of bulk commodities have generally declined. The prices of steel, copper, and aluminium have fallen by 3%-14% from their peaks in May, driving the month-on-month increase of PPI in June by 1.3 percentage points from the previous month. The market generally expects that as the policies of ensuring supply and stabilising prices continue to take effect, commodity prices will gradually return to a reasonable range.
In the next step, NDRC will continue to follow the deployment of the executive meeting of the State Council, work with relevant departments to strengthen the monitoring and forecast of commodity prices, organise subsequent release of copper, aluminium, zinc and other national reserves, and pay close attention to abnormal market price fluctuations. It will continue to strengthen the supervision of the futures spot market linkage, severely crack down on price bidding, hoarding and other illegal price behaviours, and maintain normal market order.
Yuan Da, Director of the NDRC Comprehensive Department and spokesperson of the Committee, said:
In accordance with the deployment of the State Council’s executive meeting on ensuring the supply of bulk commodities and stabilising prices, NDRC and the State Bureau of Grain and Reserves released the first batch of national reserves totalling 100,000 mt, including 20,000 mt of copper, 50,000 mt of aluminium, and 30,000 mt of zinc through open online auctions. More than 200 non-ferrous metal processing and manufacturing enterprises participated in the bidding, and the transaction prices were about 3% to 9% lower than the market prices on the day.
The market generally believes that the release of reserves is an active policy signal for maintaining the supply and stabilisation of bulk commodities, which stabilises market price expectations. At the same time, targeted placement provides a opportunities for mid- and downstream processing and manufacturing companies to restock, and reduces the raw material costs for some companies.
In the next step, the committee will thoroughly implement the deployment of the State Council and continue to organise the release of copper, aluminium and zinc reserves in batches to further ease the production and operation pressure of enterprises.