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- 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.
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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.