Monday June 29, 07:35 AM
China halts metals stockpiling for now: report
SHANGHAI (AFP) - Beijing has suspended buying non-ferrous metals for state reserves after government stockpiling led to a surge in prices, Chinese media has reported.
China has been building its inventories of metals, including 235,000 tonnes of copper, over recent months, Caijing magazine reported on its website over the weekend, citing Yu Dongming, an official with the state economic planner.
China also bought 590,000 tonnes of aluminium, 159,000 tonnes of zinc, 30 tonnes of indium and 5,000 tonnes of titanium, said Yu, who works in the National Development and Reform Commission's industry department.
"In the current market situation, aluminium firms have already started to make profits and non-ferrous metals prices have rebounded," he was quoted as saying.
"It's had the expected effect and, given these circumstances, we don't expect the state will continue to build its reserves."
Yu added that middlemen, rather than domestic companies that the government intended to support, had unexpectedly become "the biggest beneficiary" of Beijing's buying spree.
China has been buying up crude oil, copper, coal and a host of other key raw materials despite the financial slump having slashed demand for the exports responsible for the Asian giant's once ravenous appetite.
The State Reserve Bureau has been stockpiling, but so too have producers, distributors and other speculators hoping to profit from an expected rise in prices once the world economy starts to recover, analysts say.
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