China has stepped up its campaign to rein in commodity prices and reduce speculation in a bid to ease the threat to its pandemic rebound from soaring raw material costs.
The State-owned Assets Supervision and Administration Commission has ordered state-owned enterprises to control risks and limit their exposure to overseas commodities markets, according to people with knowledge of the matter. The companies have been asked to report their futures positions for Sasac to review, said the people, who asked not to be identified because the information is confidential.
In a second development, the National Food and Strategic Reserves Administration will soon release state stockpiles of metals including copper, aluminum and zinc, the agency said in a statement Wednesday. The metals will be sold in batches to fabricators and manufacturers.
Metals prices in London and Shanghai fell, as did the Singapore Exchange’s iron ore contract, and metals stocks in China and Hong Kong.
“We haven’t seen the country release state reserves for years,” said Jia Zheng, a commodity trader with Shanghai Dongwu Jiuying Investment Management Co. “This will boost short-term supply, sending a bearish signal to the market.”