China plans to enhance reserves of key industrial metals like cobalt, copper, nickel, and lithium to strengthen supply resilience amidst rising energy-transition demands and geopolitical tensions. The National Food and Strategic Reserves Administration is starting stockpiling efforts, while also expanding storage for essential commodities and diversifying suppliers to mitigate trade risks. Recent market volatility has driven metal prices higher.
China is set to enhance its strategic reserves of critical industrial metals such as cobalt, copper, nickel, and lithium. This initiative aims to bolster supply resilience in response to rising energy-transition demands and escalating geopolitical tensions. According to Bloomberg News, the National Food and Strategic Reserves Administration has initiated price inquiries and bids for various metals, guided by the National Development & Reform Commission’s (NDRC) directive to expedite stockpiling efforts.
The Chinese government has chosen to maintain a level of discretion regarding the specifics of the timing and scale of these purchases. In addition to expanding its metal reserves, Beijing is also increasing storage facilities for crucial commodities, including grain, oil, and fertilizers. This strategy is part of a broader effort to diversify suppliers and mitigate risks associated with trade disruptions, particularly those caused by tariffs imposed by the United States.
Ongoing supply constraints and uncertainties in international trade have exerted upward pressure on metal prices. For instance, copper prices have surged to approximately $10,000 per ton in London, while cobalt prices have experienced a spike attributed to an export ban in the Democratic Republic of Congo, indicating volatile market conditions in the metals sector.
In conclusion, China’s initiative to expand its strategic reserves of key industrial metals reflects a calculated response to increasing demand for energy transition and geopolitical challenges. The government’s actions, including price inquiries and storage expansions, emphasize its commitment to enhancing supply resilience and managing trade risks. The rising prices of metals underscore the current volatility in this sector, making China’s strategies particularly significant in the global context.
Original Source: www.tradingview.com
