HONG KONG, Jan 6 (Reuters) - China’s state stockpiling agency is expected to start buying up domestic copper supply this month after local smelters urged it to intervene in order to support prices, industry sources said.
The State Reserves Bureau has already invited at least one large copper smelter to sell refined copper cathode in a tender, said a source at the smelter, who declined to be named due to the sensitivity of the matter. The SRB plans to buy as much as 150,000 tonnes of copper, said the source.
The tender is likely the first step in a larger stockpiling plan. Several large copper producers wrote detailed joint proposals to the Chinese government late last month to begin a new stockpiling programme, a senior manager at a second large smelter who was briefed on the plans told Reuters on Wednesday.
Smelters began calling on the SRB to intervene in late November as prices were falling to around six-year lows on the domestic and international markets in the second half of 2015.
Domestic copper prices have risen more than 9 percent from mid-November. Prices were further supported this week on indications that the state stockpiler would purchase 100,000 tonnes out of the planned 150,000 tonnes this week, said industry sources.
A copy of the SRB’s copper tender was circulated on Chinese social media platforms on Tuesday, but it did not include the volumes or the prices.
The National Development and Reform Commission, which controls the State Reserve Bureau, did not respond to questions faxed by Reuters on Wednesday.
The copper programme follows a similar plan under consideration to stockpile aluminium that is likely to be funded by commercial loans.
Large Chinese copper smelters have already agreed to cut production and reduce sales of spot metal in an effort to boost prices.
Editing by David Stanway and Christian Schmollinger