Recent news has seen China claim it will release some reserves of metals in batches into the market, citing rising commodity costs due to the pandemic. The country believes that the release of reserves of zinc, aluminum and copper can ease the pressure on the manufacturing sector.
In the past 12 months, the price of copper has increased by 70%.
Globally, the pandemic is having a huge effect not only on minerals, but on all commodities, especially energy prices, according to a World Bank report.
In addition to trying to cover itself with its vast mineral reserves, China is also, contrary to popular belief, very aware of the climate crisis and the impacts of the global economy on the quality of life of our planet. Another important impact of China’s decision to release mineral reserves will be to affect inflation, possibly reducing it.
The rise in commodity prices is directly linked to inflation, and this step taken by China is a way to control inflation. The Global S&P Mining Index has fallen 7% in recent days, and that drop is in part due to the release of Chinese mineral reserves.
This is not all pessimistic however. Canadian mining stocks are on the rise and many new exploration opportunities are about to explode now that CV19 restrictions are lifted. Especially gold.
An ambitious plan from the Chinese government says the country plans to produce 25% of its energy from non-fossil fuel sources by 2030.