Selling of aluminium stockpile of aluminium could offset production losses caused by China’s commitment to limiting energy usage to achieve the target set for 2060.
In a bid to cool down the market and to meet emission objectives, China is considering selling about 500,000 metric tons of aluminium from state reserves, Bloomberg said in a report.
The prices of carbon-intensive metal have been falling as traders sell futures on early speculation. China’s plan and its details, including the volume of aluminium to be released, are subject to change, the person told the publication.
Moneycontrol could not independently verify the report.
Beijing is keen to prevent the increase in the price of aluminium which is used in a range of commercial goods including appliances, window frames and car parts, the person added.
“Price weakness on the back of this possibility presents a buying opportunity,” Citigroup analysts including Oliver Nugent told Bloomberg. While “this may well occur, albeit most likely gradually over the next 5 years or so, it would have only a minimal impact on the aluminium market.”
In 2020, Chinese President Xi Jinping announced the country’s plan to peak carbon emissions by 2030 and achieve carbon neutrality by 2060. China is responsible for about 28 percent of the global emissions and is the world’s biggest source of carbon dioxide.
The biggest coal-fired production hub in Inner Mongolia in northern China reportedly said that it won’t approve new projects after Beijing pulled up the industry for failing to control its energy consumption.
Selling of aluminium stockpile of aluminium could offset production losses caused by China’s commitment to limiting energy usage to achieve the target set for 2060, Bloomberg said.