While countries developed different measures against the increase in global commodity prices, China suppressed the increase in prices by selling directly to the market from its commodity reserves. There is no official statement about China's huge reserve. But it is estimated that it has enough grain to feed its 1.4 billion citizens and enough copper reserves to meet 8 percent of the world's annual demand.
According to the news of Evrim Küçük from Dünya newspaper, China has pressed the button in order to control the rising commodity prices since 2020 and reduce speculation, following a global recovery process. After the supply-related problems in the field of raw materials since the beginning of the pandemic, the prices of commodities used in the industrial sector had increased. China's National Food and Strategic Reserves Administration has decided to sell from its national reserves to mitigate threats from industrial raw material costs. Just as meat prices had previously sold pork stocks to cool inflation concerns, it has now repeated the sale for metals.
China, which has released some metals such as copper for the first time since 2005 and aluminum and zinc for the first time since 2010, aims to prevent the risks that may arise from excessive increases in prices and to control inflationary pressures. 20 thousand tons of copper, 50 thousand tons of aluminum and 30 thousand tons of zinc were released by selling to these manufacturers and producers in bulk. Afterwards, oil sales were also carried out. China's use of its reserves somewhat cooled the rally in metal prices. There is no official statement about the country's reserves, but according to the estimates of financial institutions, China is almost the world's commodity warehouse.
Congestion in ports brings freight to 10-year high
The container jam in the world for months continues to increase the freight. The Baltic Dry Index, which includes freight for Capesize, Panamax, Supramax and Handysize vessels, reached its highest level in 10 years. The index, which is one of the main indicators for the shipping costs of the shipping industry, has reached its highest level since mid-2010. The overall index increased by around 3 percent on the last trading day of last week, reaching 3565 points. The sub-components of the index, on the other hand, increased by more than 5 percent. The daily profitability of ships carrying more than 150 thousand tons of cargo increased by 1863 dollars to 38 thousand 217 dollars. The Capesize index, which tracks 150,000 tons of iron ore and coal cargoes, hit 4,766 points, up 3.4 percent on Friday, hitting a four-month high; and the Panamax index, which tracks about 60,000 to 70,000 tons of coal and grain cargoes, has risen to 3,566 since July 21. Among smaller vessels, the Supramax index reached an all-time high of 3,098. Congestion in Chinese ports and weather concerns in the Pacific were effective in the increase.
The world's third busiest container port, Ningbo-Zhoushan, still remains partially closed amid coronavirus concerns. China's Ningbo-Zhoushan container port has decided to close parts of it after an employee tested positive for the coronavirus. It is feared that the Meishan terminal of Ningbo-Zhoushan port, which has been closed for a week, will harm regional trade in the long run. The closed Meishain terminal handles about 25 percent of the containers arriving in Ningbo-Zhoushan. Experts say that the freight will stay higher for a while, but the rates may decrease during the New Year holiday period.
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