China’s metals reserves snapped up at auction as Beijing tries to cool red-hot commodity prices
- China’s state reserves agency auctioned aluminium, copper and zinc this week, with most of the metal reserves snapped up in two days
- The reserves administration put a total of 100,000 tonnes of metal on the market on Monday and said it will release more metal in near future
The first round of China’s much-anticipated state metal reserves auctions needed only one of two days allotted for all the copper and aluminium on offer to be sold, notices on the bidding platforms and two industry sources said.
The aluminium was split into around 200 lots, with the auction of the last 250 tonnes taking place at 7:52pm on Monday, a notice on the bidding platform operated by state-owned Norinco showed.
The buyers were not named, although only manufacturers and fabricators were allowed to bid.
One source at a state-run metals firm following the auctions said the aluminium was sold at around 18,075 yuan (US$2,797) a tonne, a 5.3 per cent discount to aluminium’s settlement price on the Shanghai Futures Exchange (ShFE) on Monday.
For copper, bidding began at 8am 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,” said a second source following the auctions, who works at a copper wire maker. He put the sale price at around 67,700 yuan a tonne, a 1.6 per cent discount to the price of ShFE copper for delivery in August.
No notices for zinc sales were visible but the first source said the metal was sold at around 21,000 yuan a tonne, versus a ShFE zinc price of about 22,000 yuan.
In a statement on Wednesday, the reserves administration confirmed it had put a total of 100,000 tonnes of metal on the market on Monday and said it would continue to release state reserves in the near future.