Will China Release Aluminum Stockpiles? ... Shanghai Aluminum Prices Plummet

[Image source= Bloomberg]

[Asia Economy Reporter Park Byung-hee] Bloomberg News reported on the 23rd (local time), citing officials, that the Chinese government is considering releasing 500,000 tons of aluminum stockpiled in reserves to stabilize the rising aluminum prices.

As aluminum supply decreased, the price of aluminum on the Shanghai Exchange approached 18,000 yuan per ton earlier this month, soaring to the highest level in 10 years.

The Chinese central government limited energy use aiming to achieve a carbon-neutral economy by 2060, which reduced aluminum supply. The government of the Inner Mongolia Autonomous Region, one of China's main aluminum production areas, also announced it would halt additional aluminum production permits in accordance with the central government's energy consumption controls.

In response to the soaring aluminum prices, the government decided to release reserved stock to resolve the supply shortage.

With expectations that the government would release stockpiles into the market, aluminum prices on the Shanghai Exchange fell to the price limit, dropping temporarily to around 16,500 yuan per ton that morning.

China is the world's largest aluminum producer, accounting for 60% of global aluminum production.

In 2010, China also released aluminum from government reserves. In addition to aluminum, zinc, magnesium, cotton, and corn reserves were released into the market in 2010.

This content was produced with the assistance of AI translation services.