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

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China’s state reserves agency auctioned aluminium, copper and zinc early this week. Photo: Reuters

Published: 5:06pm, 7 Jul 2021Updated: 8:46am, 8 Jul 2021

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.

In a rare move aimed at cooling a rally in metal prices that has pushed up raw material costs for Chinese manufacturers, the National Food and Strategic Reserves Administration said last month it would sell 50,000 tonnes of aluminium, 30,000 tonnes of zinc and 20,000 tonnes of copper on Monday and Tuesday.

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.