Under the pressure of inflation, the government began to intervene frequently in prices, and the State Reserve Bureau, one of the participating macroeconomic regulatory agencies, has also recently intensively sold base metals to prevent excessive price increases.
From mid-October to November 25, the State Reserve Bureau has turned magnesium, aluminum, zinc and lead round again, while aluminum has ended its second round of dumping.
Shen Jianxin, general manager of Shanghai Jinghu Aluminum Co., Ltd., which is engaged in the aluminum trade, believes that throwing reserves by the State Reserve Bureau has brought tremendous pressure on the market. "In the future, it is very likely that it will continue to sell to stabilize prices."
The Deputy Chairman of the China Nonferrous Metals Industry Association, Shang Fushan, believes that there is no problem in China's basic metal market, and the SRB should not continue to cast reserves, especially copper. “Only in the case of an emergency, it is thrown out. time".
According to Sheng Weimin, chief analyst of Wanxiang Resources, the Chinese government’s determination is behind the SFC’s reserve deposit. Although China’s demand is strong and its fundamentals are good, the Chinese government has the ability to change the rapid increase in basic metal prices driven by demand.
The State Reserve Bank has deposited and deposited in the article “Recently Decreased Prices of Commodities in Recent Commodities†issued by the National Development and Reform Commission’s official website on November 25. According to the monitoring of the transaction prices of domestic bulk commodities, since November 12th, domestic Commodity prices fell sharply. For example, copper, aluminum, and zinc fell by 10.98%, 6.38%, and 18.35%, respectively.
Although the article does not mention the State Reserve Bureau, from the actual situation, a series of actions taken by the State Reserve Bureau to throw deposits put great pressure on the market, because the market firmly believes that the State Reserve Bureau has the determination and ability to influence the market.
Starting from October 12, the State Reserve Bureau commissioned the State Reserve Materials Regulatory Center to bid for basic metals such as magnesium, aluminum, zinc, and lead, with a total volume of 0.3 million tons, 96,000 tons, 50,000 tons, and 34,500 tons respectively. Aluminum made two rounds of sales, and the second round ended one day earlier on November 23, totaling 117,000 tons.
From the perspective of density, in recent years, it has been unprecedented. There are as many as five rounds of sales in just two months, and the average price of metal magnesium, aluminum, zinc and lead sold is 15,087 yuan/t and 15,343 yuan/t respectively. 19750 yuan / t and 17030 / t, are lower than the market price over the same period, such as November 1 when throwing aluminum in the Yangtze River spot market price of yuan / t.
From the end of 2008 to 2009, affected by the financial crisis, metal producers all over the world have accumulated a large inventory of metal inventory, and natural metal prices have also dropped sharply, with copper prices being the most devastating ones in October 2008.
Under this circumstance, the SRB collected 590,000 tons of aluminum and 159,000 tons of zinc through public bidding. The payment price of aluminum was about 10% higher than the spot price of the Shanghai Futures Exchange over the same period, and the zinc price was about 5% higher. China's domestic metal prices have also quickly reached the State Reserve Bureau purchase price, which has a significant effect on the market.
In this dumping, industry insiders, including Sheng Weimin and Shen Jianxin, all said that the State Reserve Bureau's throwing of reserves has brought tremendous pressure on the market, and even the international market has been relatively tight. Sheng Weimin said that the SRB’s action as a government department is extremely suggestive. “The increase in the base metals mainly depends on the Chinese market. If China firmly controls the price increase, the driving force of the Chinese market will be significantly curbed. Unsustainable."
Profit or control inflation?
According to the official website of the State Reserve Bureau, the State Reserve Bureau, as an agency of the National Development and Reform Commission, is responsible for formulating strategies and plans for national strategic material reserves and organizing the collection, use, rotation, and day-to-day management of national strategic materials. The general requirement is to serve the national defense construction. , respond to emergencies, participate in macro-control, and maintain ****.
"This round of throwing storage is mainly to prevent inflation." Sheng Weimin said that overall, the basic metal prices are not high, but due to the excessive growth of CPI, the State Reserve Bureau hopes to control the CPI through the stockpile to grow too fast.
On November 11, the National Bureau of Statistics released China's economic performance in the first 10 months of 2010. In October, CPI rose by 4.4% year-on-year, a record high in recent years. The increase was 0.8 percentage point higher than September and 0.7% month-on-month.
The Chinese government set a 3% cap on growth for the 2010 CPI, but Zhang Ping, director of the National Development and Reform Commission, confirmed that the 2010 CPI will exceed 3% under the pressure of successive CPI surges.
As a basic raw material, the basic metal, the rapid increase in its price will also bring the pressure of rapid CPI growth. Stabilizing the base metal and even reducing the base metal price is undoubtedly a powerful means of controlling the CPI. The so-called State Reserve Bureau is involved in macro-control.
Although the amount deposited by the State Reserve Bureau is still relatively thin compared to the entire consumption in China, the psychological impact on the market is extremely large. As a heavyweight trader in the domestic aluminum trade, Shen Jianxin is very concerned about the actions of the State Reserve Bureau. “Although the market tends to be bullish, no one can doubt the capacity of the State Reserve Bureau. Now the total amount is really small, but it gives You throw 100,000 tons of aluminum a month. Even if you throw it for a year, the market price will basically not rise, and even drop."
Continue or not?
After selling a variety of basic metals, the follow-up actions of the State Reserve Bureau became a topic of concern to the market. Among them, “throwing copper†has become a topic. As one of the most important base metals, copper did not appear in the large-scale dumping announcement of the SRB in the past two months.
Sheng Weimin believes that the State Reserve Bureau is already throwing copper, but the amount is relatively small. According to its report, domestic copper production is basically stable, and its import volume is also declining. However, both copper's semi-finished products and the Shanghai Stock Exchange's copper inventories are on the rise. Therefore, it can only be interpreted as the existence of hidden stocks, which are mainly from the State Reserve. Bureau throw copper.
"To throw copper in great fanfare is not good for the market." Sheng Weimin said that compared to other basic metals, the State Reserve Bureau has less copper metal. "There are probably 250,000 to 300,000 tons of copper is more credible." In addition, copper is In the base metals, China has always faced a variety of products that are not supplied. If copper is thrown openly, once the outsiders learn that the copper stock of the State Reserve Bureau has fallen, it is inevitable that foreign countries will take the opportunity to speculate on the copper market.
"Received and left." Shang Fushan believes that copper is different from other basic metals as a strategic material, so unless there is an emergency situation, the State Reserve Bureau should not throw copper, and it is still far from an emergency.
"Whether or not to continue to deposit reserves, the key depends on whether there is a more decent adjustment in the base metal price, from the depth and scope." Sheng Weimin said that the subsequent basic metal actions of the State Reserve Bureau depend mainly on the judgment of prices.
However, Sheng Weimin believes that although there is a need to pressurize inflation, the SRB must still do what it can and should not short-sell inventory. In addition, Sheng believes that with the rise of market forces, domestic companies have considerable ability to ensure the stability of raw material supply.
From mid-October to November 25, the State Reserve Bureau has turned magnesium, aluminum, zinc and lead round again, while aluminum has ended its second round of dumping.
Shen Jianxin, general manager of Shanghai Jinghu Aluminum Co., Ltd., which is engaged in the aluminum trade, believes that throwing reserves by the State Reserve Bureau has brought tremendous pressure on the market. "In the future, it is very likely that it will continue to sell to stabilize prices."
The Deputy Chairman of the China Nonferrous Metals Industry Association, Shang Fushan, believes that there is no problem in China's basic metal market, and the SRB should not continue to cast reserves, especially copper. “Only in the case of an emergency, it is thrown out. time".
According to Sheng Weimin, chief analyst of Wanxiang Resources, the Chinese government’s determination is behind the SFC’s reserve deposit. Although China’s demand is strong and its fundamentals are good, the Chinese government has the ability to change the rapid increase in basic metal prices driven by demand.
The State Reserve Bank has deposited and deposited in the article “Recently Decreased Prices of Commodities in Recent Commodities†issued by the National Development and Reform Commission’s official website on November 25. According to the monitoring of the transaction prices of domestic bulk commodities, since November 12th, domestic Commodity prices fell sharply. For example, copper, aluminum, and zinc fell by 10.98%, 6.38%, and 18.35%, respectively.
Although the article does not mention the State Reserve Bureau, from the actual situation, a series of actions taken by the State Reserve Bureau to throw deposits put great pressure on the market, because the market firmly believes that the State Reserve Bureau has the determination and ability to influence the market.
Starting from October 12, the State Reserve Bureau commissioned the State Reserve Materials Regulatory Center to bid for basic metals such as magnesium, aluminum, zinc, and lead, with a total volume of 0.3 million tons, 96,000 tons, 50,000 tons, and 34,500 tons respectively. Aluminum made two rounds of sales, and the second round ended one day earlier on November 23, totaling 117,000 tons.
From the perspective of density, in recent years, it has been unprecedented. There are as many as five rounds of sales in just two months, and the average price of metal magnesium, aluminum, zinc and lead sold is 15,087 yuan/t and 15,343 yuan/t respectively. 19750 yuan / t and 17030 / t, are lower than the market price over the same period, such as November 1 when throwing aluminum in the Yangtze River spot market price of yuan / t.
From the end of 2008 to 2009, affected by the financial crisis, metal producers all over the world have accumulated a large inventory of metal inventory, and natural metal prices have also dropped sharply, with copper prices being the most devastating ones in October 2008.
Under this circumstance, the SRB collected 590,000 tons of aluminum and 159,000 tons of zinc through public bidding. The payment price of aluminum was about 10% higher than the spot price of the Shanghai Futures Exchange over the same period, and the zinc price was about 5% higher. China's domestic metal prices have also quickly reached the State Reserve Bureau purchase price, which has a significant effect on the market.
In this dumping, industry insiders, including Sheng Weimin and Shen Jianxin, all said that the State Reserve Bureau's throwing of reserves has brought tremendous pressure on the market, and even the international market has been relatively tight. Sheng Weimin said that the SRB’s action as a government department is extremely suggestive. “The increase in the base metals mainly depends on the Chinese market. If China firmly controls the price increase, the driving force of the Chinese market will be significantly curbed. Unsustainable."
Profit or control inflation?
According to the official website of the State Reserve Bureau, the State Reserve Bureau, as an agency of the National Development and Reform Commission, is responsible for formulating strategies and plans for national strategic material reserves and organizing the collection, use, rotation, and day-to-day management of national strategic materials. The general requirement is to serve the national defense construction. , respond to emergencies, participate in macro-control, and maintain ****.
"This round of throwing storage is mainly to prevent inflation." Sheng Weimin said that overall, the basic metal prices are not high, but due to the excessive growth of CPI, the State Reserve Bureau hopes to control the CPI through the stockpile to grow too fast.
On November 11, the National Bureau of Statistics released China's economic performance in the first 10 months of 2010. In October, CPI rose by 4.4% year-on-year, a record high in recent years. The increase was 0.8 percentage point higher than September and 0.7% month-on-month.
The Chinese government set a 3% cap on growth for the 2010 CPI, but Zhang Ping, director of the National Development and Reform Commission, confirmed that the 2010 CPI will exceed 3% under the pressure of successive CPI surges.
As a basic raw material, the basic metal, the rapid increase in its price will also bring the pressure of rapid CPI growth. Stabilizing the base metal and even reducing the base metal price is undoubtedly a powerful means of controlling the CPI. The so-called State Reserve Bureau is involved in macro-control.
Although the amount deposited by the State Reserve Bureau is still relatively thin compared to the entire consumption in China, the psychological impact on the market is extremely large. As a heavyweight trader in the domestic aluminum trade, Shen Jianxin is very concerned about the actions of the State Reserve Bureau. “Although the market tends to be bullish, no one can doubt the capacity of the State Reserve Bureau. Now the total amount is really small, but it gives You throw 100,000 tons of aluminum a month. Even if you throw it for a year, the market price will basically not rise, and even drop."
Continue or not?
After selling a variety of basic metals, the follow-up actions of the State Reserve Bureau became a topic of concern to the market. Among them, “throwing copper†has become a topic. As one of the most important base metals, copper did not appear in the large-scale dumping announcement of the SRB in the past two months.
Sheng Weimin believes that the State Reserve Bureau is already throwing copper, but the amount is relatively small. According to its report, domestic copper production is basically stable, and its import volume is also declining. However, both copper's semi-finished products and the Shanghai Stock Exchange's copper inventories are on the rise. Therefore, it can only be interpreted as the existence of hidden stocks, which are mainly from the State Reserve. Bureau throw copper.
"To throw copper in great fanfare is not good for the market." Sheng Weimin said that compared to other basic metals, the State Reserve Bureau has less copper metal. "There are probably 250,000 to 300,000 tons of copper is more credible." In addition, copper is In the base metals, China has always faced a variety of products that are not supplied. If copper is thrown openly, once the outsiders learn that the copper stock of the State Reserve Bureau has fallen, it is inevitable that foreign countries will take the opportunity to speculate on the copper market.
"Received and left." Shang Fushan believes that copper is different from other basic metals as a strategic material, so unless there is an emergency situation, the State Reserve Bureau should not throw copper, and it is still far from an emergency.
"Whether or not to continue to deposit reserves, the key depends on whether there is a more decent adjustment in the base metal price, from the depth and scope." Sheng Weimin said that the subsequent basic metal actions of the State Reserve Bureau depend mainly on the judgment of prices.
However, Sheng Weimin believes that although there is a need to pressurize inflation, the SRB must still do what it can and should not short-sell inventory. In addition, Sheng believes that with the rise of market forces, domestic companies have considerable ability to ensure the stability of raw material supply.