China is set to increase its strategic reserves of essential industrial metals such as cobalt, copper, nickel, and lithium to enhance supply resilience. The efforts are influenced by energy transition demands and geopolitical tensions, with storage expansions and supplier diversification also underway.
China is initiating a plan to augment its strategic reserves of crucial industrial metals such as cobalt, copper, nickel, and lithium. This expansion aims to enhance supply resilience in response to the increasing demand driven by energy transition initiatives and ongoing geopolitical tensions.
The National Food and Strategic Reserves Administration has commenced price inquiries and bidding processes for specific metals, influenced by directives from the National Development and Reform Commission (NDRC) to expedite stockpiling activities, as reported by Bloomberg News. The precise timeline and scale of these purchases remain undisclosed by the government.
Moreover, Beijing is broadening its storage infrastructure for key commodities like grain, oil, and fertilizers. This move is part of a strategy to diversify suppliers in order to mitigate risks stemming from potential trade disruptions, particularly those resulting from tariffs imposed by the United States.
Recent supply constraints alongside trade uncertainties have led to a substantial uptick in metal prices. For instance, copper has recently reached $10,000 per ton in London, while cobalt prices have escalated following an export ban enforced by the Democratic Republic of Congo, further fueling market instability.
In conclusion, China’s initiative to enhance its strategic metal reserves reflects its commitment to bolster supply security amid rising energy-transition demands and geopolitical challenges. Their efforts to diversify storage and suppliers additionally highlight a proactive approach to mitigating trade risks. As metal prices continue to fluctuate due to global uncertainties, these developments will be critical in shaping China’s industrial landscape.
Original Source: www.tradingview.com
