China will release more metals stockpiles in an effort to control soaring commodities prices

Copper
An employee produces copper wires at Nanjing Gree Electric Enterprise Co. in China.

  • China is pumping copper, aluminum, and zinc into commodity markets to tamp down soaring prices.
  • The move, first reported by Bloomberg, comes as commodity prices have marched steadily upward for months.
  • But Wednesday’s commodity reserves dump is just a fraction of the country’s estimated reserves.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

China is pumping copper, aluminum, and zinc into commodity markets to tamp down soaring materials costs, the country’s strategic reserves agency announced on Wednesday.

The move, which was first reported by Bloomberg, comes as commodity prices have marched steadily upward for months, with the S&P GSCI commodity index rising more than 30% year-to-date.

Last month, the strategic reserves agency pledged to keep commodity prices down, to prevent supply cost crunches that have begun to creep in. June saw China’s producer price index, a measure of inflation faced by suppliers, rise 9%, the highest rate in over a decade.

China appears to still be keeping some of its powder dry, however. Wednesday’s commodity reserves dump – consisting of around 100,000 tons of copper, aluminum, and zinc – is just a fraction of the country’s estimated reserves. Prior to this sale, China held two million tons of copper, 800,000 tons of aluminum, and 350,000 tons of zinc in reserve, according to a Citibank estimate reported by CNBC.

Copper futures were up about 2% overnight.

Read the original article on Business Insider

Metal prices sink after China says it has zero tolerance for the commodity hoarders driving costs higher

iron ore
Visitors examine iron ore pellets produced by the LKAB mine in Kiruna, a mining town in the Swedish Arctic March 30, 2015.

  • Metals prices dropped Monday after China announced a strategy that could crack down on commodity hoarders who are driving costs higher.

  • Chinese steel rebar futures closed 2.7% lower and iron ore dropped 3%, according to Bloomberg data.
  • China will show “zero tolerance” for monopoly behavior and hoarding, said a report from the National Development and Reform Commission.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Metals prices dropped Monday after China announced a strategy that could crack down on commodity hoarders who are driving costs higher.

Chinese steel rebar futures closed 2.7% lower and iron ore dropped 3%, after earlier being down more than 7%, according to Bloomberg data.

To push back against soaring commodities prices, China will show “zero tolerance” for monopoly behavior and hoarding and will continue to increase law enforcement inspections and investigate abnormal transactions, said a report from the National Development and Reform Commission.

The report was released after China summoned executives from top metals producers and officials from multiple government departments to talk about iron ore, steel, copper, and aluminium on Sunday.

The NDRC said that “excessive speculation” has disrupted the normal production and sales cycle in commodities and contributed to price increases. According to Bloomberg, the NDRC started warning about higher raw-materials prices in April.

Aluminum dropped 1.09% to $2,370 a ton on the London Metal Exchange. Copper was down 1.66% to $9,881 a ton.

Read the original article on Business Insider