China accesses federal reserves to rein in commodity prices

China has decided to tap into its gigantic – and secret – state reserves amid the campaign to curb rising commodity prices.

The country plans to expand pork stocks to strengthen control over the market, as officials call for faster construction of coal reserves infrastructure and consider setting a maximum price due to skyrocketing energy prices.

The latest move targets base metals: China plans to offer copper, aluminum, and zinc directly to end-users to cool the rally, according to people familiar with the matter (who declined to be identified).

Commodities hit their highest level in a decade, with copper and coal hitting records last month as demand outstrips supply and the global recovery accelerates.

This scenario reinforces the concern that manufacturers have to pass on higher costs to consumers at some point, harming the economy.

Source: Money Times

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