(Yicai Global) July 19 -- China may sell more copper, aluminum, zinc, originating from the country's national reserves, to maintain normal market order amid the rising commodity prices, according to an official at the country's macroeconomic planning agency.

Prices will gradually return to a reasonable range as the government's measures to ensure supply and stabilize prices continue to yield effects, Wan Jinsong, department head of the National Development and Reform Commission, said during a press conference today.

First 2021 Intervention

China recently dipped into its national reserves of copper, aluminum, and zinc for the first time this year in an effort to guide market pricing.

On July 5, the NDRC and the National Food and Strategic Reserves Administration unleashed 100,000 tons of different raw materials from the reserves for bidders from the nonferrous metal processing and manufacturing sectors. The tally included 20,000 tons of copper, 50,000 tons of aluminum, and 30,000 tons of zinc. The final prices were from 3 to 9 percent below market prices that day.

Before that, oversight was strengthened. Since May, the NDRC and other government agencies have summoned key players in China's iron ore, steel, copper, and aluminum sectors for talks while urging firms to operate in accordance with laws and regulations.

Supervision is likely to become more apparent. The NDRC, together with other related agencies, will continue to enhance monitoring and forecasting while keeping a close eye on abnormal price fluctuations, said Wan.

The commission will step up coordinated oversight of futures and spot markets, and crack down on speculation, hoarding, and other illegal practices, he added.

Effects

The measures seem to be working as prices are not rising as fast anymore.

The July 5 operation achieved the expected target and stabilized pricing expectations, according to spokesperson Yuan Da. The move provided a window of opportunity for middle and downstream enterprises to replenish inventory while reducing costs, Yuan added.

Commodity prices have entered a relatively stable stage of adjustments amid widening inventories and falling price indexes, according to Hu Qimu, chief researcher at the Sinosteel Economic Research Institute. That went against market participants' earlier predictions of continuous hikes, Hu added.

But from the perspective of global economic recovery, commodity prices are still underpinned by relatively strong demand, the researcher added.

Editors: Xu Wei, Emmi Laine, Xiao Yi