Explanation-What China keeps in its secret reserves of raw materials
(Reuters) – For the first time in a decade, China has released some of its strategic metals stocks in an attempt to mitigate a price hike that is hurting manufacturers. He also freed up reserves of imported coal and corn to cool prices, while buying pork to support that market.
China is the world’s largest user of raw materials and has accumulated vast reserves. The following are details on major commodities and estimates and assessments of strategic reserve levels
(For a graph on China’s commodity market share versus the rest of the world -)
Based on past storage activities, analysts estimate that China’s strategic reserves contain between 1.5 and 2 million tonnes of copper, 800,000 to 900,000 tonnes of aluminum and 250,000 to 400,000 tonnes of zinc. .
The reserves administration also stores key battery metal cobalt, which industry sources estimate China holds about 7,000 tonnes. It also retains nickel and other metals including antimony, indium, germanium, and molybdenum oxide.
According to the International Tin Association and the International Lead and Zinc Study Group, it does not contain tin or lead, respectively.
CEREALS AND MEAT
China’s grain reserves are sufficient to feed its 1.4 billion citizens, with a storage capacity exceeding 650 million tonnes, Xinhua reported in April, but did not specify how long the reserves could feed. population.
Cereal storekeeper Sinograin will start building 120 storage facility projects, totaling 10.85 million tonnes of capacity, state media reported in July.
Stocks of rice and wheat are enough to cover more than a year of the country’s consumption, Liang Yan, deputy head of the reserves administration, told a press conference in April.
Wheat and rice make up about 70 percent of the Chinese state’s grain reserves, which are held both centrally and locally, state television reported in August 2020.
(For a graph on China’s share in world crop stocks since 2000/2001 -)
The country’s meat reserves contained nearly one million tonnes of pork in 2019, according to a South China Morning Post report at the time citing an analyst.
The pork should be turned regularly to make sure it does not spoil.
The Chinese state’s corn reserves were estimated at around 200 million tonnes in 2017, according to market consensus, and have been reduced to almost zero by 2020 as the agency sold aging grains.
Beijing sold more than 56 million tonnes of corn from its reserves in 2020, according to Reuters calculations, based on statements posted on the National Grain Trade Center website.
China has stepped up imports of pork for its reserves after African swine fever hit the country in August 2018 and wiped out 50% of the country’s pigs in a year.
The meat division of state-owned Cofco said in 2019 it had more than doubled the amount it would spend each year on purchasing meat for central reserves, to a high of 1.48 billion yuan ($ 228.6 million) in 2020 and 2021.
That would buy around 115,000 tonnes, based on a cost of around $ 2,000 per tonne for imported pork, according to Reuters calculations.
SPR’s Chinese sites currently hold 220 million barrels of crude oil, the equivalent of 15 days of demand, according to consulting firm Energy Aspects.
However, total crude oil inventories, including SPR, commercial storage and oil companies, are expected to be able to cover 60 days of consumption, said Liu Yuntao, analyst at Energy Aspects.
The International Energy Agency, a Paris-based watchdog, recommends that members keep 90 days of net oil imports in reserve, although China is not a member.
The SPR’s last public update was in 2017, when the National Bureau of Statistics said China had built nine storage bases with a total reserve capacity of 37.73 million cubic meters, or 237.66 million. barrels, crude oil.
In September 2019, China’s National Energy Administration said the country had oil stocks that could last for 80 days and included those in the SPR, storage at oil companies and commercial reservoirs. [here]
China has been more outspoken on coal. The National Development and Reform Commission, the state planner, asked in April that coal reserves reach more than 120 million tonnes this year.
The commission also set a target of building up 400 million tonnes of commercial coal reserves, with power plants to hold around 200 million tonnes, coal miners 100 million tonnes and coal distributors 100 million tonnes.
($ 1 = 6.4752 yuan)
China’s commodity market share to the rest of the world (%) tmsnrt.rs/3BqDS8T
China’s share in world crop stocks since 2000/2001 tmsnrt.rs/2Wk2oZe
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ ^ ^^^^^^^^^>
Additional reporting by Muyu Xu, Aizhu Chen, Hallie Gu and Dominique Patton; Editing by Jacqueline Wong