Copper price rose on Wednesday despite China’s announcement that will release more base metals from its state reserves after completing the first batch of sales in its latest effort to rein in surging raw material costs.
More sales will be arranged in the near term to ensure market stability, the National Food and Strategic Reserves Administration said in a statement on its website Wednesday.
Copper for delivery in September rose 2.6% from Tuesday’s settlement price, touching $4.362 per pound ($9,596 per tonne) midday Wednesday on the Comex market in New York.
The release of state metal reserves is one of a number of attempts by Beijing to cool a stellar rally in commodity prices that has squeezed manufacturers’ margins.
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The first release of metals in over a decade included 20,000 tonnes of copper, 30,000 tonnes of zinc and 50,000 tonnes of aluminum and was concluded via a public auction on Monday. The reserves agency didn’t reveal the prices at which the metals were sold.
The Shanghai Metal Exchange Market reported on Monday some of the highest bids accepted, citing information from buyers. They included 67,718 yuan ($10,474) a tonne for copper, 18,074 yuan a tonne for aluminum and 21,200 yuan a tonne for zinc, all of which were below spot market prices.
For copper, bidding began at 8 a.m. Beijing time and the last lot of 146 tonnes was auctioned just 75 minutes later, according to the China Minmetals Corp platform hosting the sales.
“It was grabbed within seconds,” a source told Reuters.
(With files from Bloomberg and Reuters)