China plans to expand its strategic reserves of key industrial metals including cobalt, copper, nickel, and lithium to strengthen supply resilience amid energy-transition demands and geopolitical tensions. The National Food and Strategic Reserves Administration is actively seeking to procure these metals. Additionally, the government is expanding storage facilities for essential commodities to mitigate trade disruption risks, amidst rising metal prices due to recent supply constraints.
China is set to augment its strategic reserves of vital industrial metals such as cobalt, copper, nickel, and lithium. This expansion is aimed at enhancing supply resilience, particularly in response to the escalating demand associated with the energy transition and ongoing geopolitical tensions. Following directives from the National Development & Reform Commission (NDRC), the National Food and Strategic Reserves Administration has initiated inquiries and bids for various metals, as reported by Bloomberg News.
While specific details regarding the timing and scale of the purchases remain undisclosed, it is clear that the Chinese government is actively pursuing this initiative. In addition to bolstering metal reserves, Beijing is also expanding its storage capabilities for critical commodities, including grain, oil, and fertilizers. This strategy is coupled with a diversification of suppliers to lessen the impact of potential trade disruptions, particularly those stemming from tariffs imposed by the United States.
Recent market dynamics have contributed to rising metal prices, driven by supply constraints and trade uncertainties. For instance, copper prices have surged to $10,000 per ton in London, while cobalt prices have experienced significant upward movement, largely attributed to an export ban enacted by the Democratic Republic of Congo. This pricing pressure underscores the crucial need for China to secure stable supplies of these essential materials.
In summary, China is proactively enhancing its strategic metal reserves to meet rising demands and navigate geopolitical challenges. The government’s actions reflect a concerted effort to fortify supply chains and mitigate risks associated with trade disruptions. This initiative not only aims to stabilize metal prices but also ensures China’s readiness for future industrial needs.
Original Source: www.tradingview.com
