China is planning to increase its reserves of crucial industrial metals this year to strengthen the stability of mineral supplies as demand for energy-transition rises and global tensions escalate. The government intends to purchase cobalt, copper, nickel, and lithium to bolster its strategic reserves, as reported by sources who requested anonymity due to the private nature of the discussions. The National Food and Strategic Reserves Administration, responsible for managing the country's official commodity stockpiles, has been making price inquiries and looking to acquire some of these metals.
The National Development & Reform Commission, China's primary planning authority overseeing stockpiles, hinted at the plan in its recent report for the country's annual parliament session. The agency mentioned that China would accelerate efforts to meet its annual task of stockpiling essential goods. Despite requests for comments, the NDRC did not reply.
China's state stockpiler, previously named the State Reserve Bureau, handles a range of inventories, from crude oil to pork and copper, and its substantial purchases can significantly impact market prices. The stockpiler has been accumulating metal stocks, including cobalt, in recent years and updating copper inventories on a rotating basis.
This initiative by Beijing is primarily focused on ensuring adequate supply during critical periods, with the added benefit of stabilizing prices by managing supplies. Although the Chinese government sometimes discloses its stockpiling intentions, specific details regarding timing and quantities are usually kept confidential.
In its annual report, the NDRC outlined plans to expand storage facilities for various commodities such as grain, cotton, sugar, meat, and fertilizers, along with enhancing national oil reserve bases and general storage warehouses. The commission aims to enhance reserve management and operational efficiency.
China has been diversifying its commodity suppliers to reduce risks for some time, but it is now facing challenges from global trade disruptions caused by US President Donald Trump's tariffs and ensuing market fluctuations. As a result, prices of certain metals have surged.