UTC+8 ( BJT)

Beijing sticks to stabilizing commodity supply and prices

ABSTRACT

Beijing will be unwavering in efforts to stabilize the supplies and prices of bulk commodities in the coming months while acknowledging the persistent tightness in supply and chances for price surges, related officials shared at the press conferences of China’s National Bureau of Statistics (NBS) and National Development and Reform Commission (NDRC) on September 15-16.

NBS’ spokesman Fu Linghui repeated at the press conference on September 15 that China’s faster growth in Producer Price Index (PPI) in August was mainly due to higher prices of raw materials such as coal, petrochemical products and steel. Over January-August China’s PPI grew faster by 6.2% on year than the 5.7% on-year growth over January-July, as reported.


 

He acknowledged that remaining high commodity prices and uncertainties in the global market may keep China’s PPI at a high level in the near term, besides, “in the domestic market, supply is still tight for some upstream industrial products, making it likely for their prices to soar,” he added. 

 

So far, though, some measures taken by Beijing have shown some achievements in stabilizing bulk commodities’ supplies and prices, Li Hui, a senior official from NDRC, pointed out at commission’s press conference on September 16.

 

For example, China released 420,000 tonnes of copper, zinc and aluminium in total from the state reserves via three batches over July-September, and these have “helped to stabilize the market expectation, slowed the growths in copper, zinc and aluminium prices, and illustrated the country’s resolution to regulate the bulk commodity market,” she said.

 

She admitted, though, that China’s copper, aluminum and zinc prices still hover high, and related enterprises are expecting the government’s continuing efforts in stabilizing bulk commodity prices and supplies.

 

Therefore, “we will closely monitor market price trends, the changes in supply-demand, and will guide these prices back to their reasonable ranges by releasing more state reserves to rectify the imbalance in fundamentals,” she stated.

 

As for coal, a contributor to the higher PPI in August, Meng Wei, NDRC’s spokeswoman shared Beijing’s recent moves to stabilize the supply and the prices, among which was the commission’s request for 100% coal supply for the country’s power houses and heat supplying enterprises under medium- and long-term deals with domestic coal miners, so as to guarantee coal supply for civilian use and lower social coal consumption costs.

 

Besides, among the 11 fixed assets investment projects approved by NDRC in August at a total value of Yuan 100.6 billion ($15.6 billion), most were in the energy and transportation sector, she added.

 

Written by Olivia Zhang, zhangwd@mysteel.com

Edited by Hongmei Li, li.hongmei@mysteel.com