China has stepped up its campaign to curb commodity prices and curb speculation in an effort to lessen the threat to its pandemic rebound from soaring commodity prices.

State-owned enterprises have been ordered to control risks and limit their exposure to foreign commodity markets by the Commission for Supervision and Administration of State-Owned Assets, according to people familiar with the matter. The companies have been asked to report their future positions to the committee for consideration, said the people, who asked not to be identified because the information is confidential.

In a second development, the National Food and Strategic Reserves Administration will soon release the state’s metal stocks, including copper, aluminum and zinc, the agency said in a statement last week. The metals will be sold in batches to manufacturers and manufacturers, he said, without giving the volumes to be released.

Most metal prices in London and Shanghai fell, as did the Singapore Stock Exchange’s iron ore contract. Shares of metals companies in China and Hong Kong fell, while Australia’s metals and mining sub-index posted its biggest loss in nearly a month. Mining and steel values ​​fell in Europe, with Rio Tinto, BHP Group and ArcelorMittal losing at least 0.8%.

“We haven’t seen the country release state reserves in years,” said Jia Zheng, commodities trader at Shanghai Dongwu Jiuying Investment Management Co. “This will boost supply in the short term, sending a signal bearish to the market. “

The scrutiny of overseas commodity positions, meanwhile, is aimed at “curbing excessive speculation as prices are overheated and could pose risks,” Jia said.

Rising commodity prices have fueled concerns in China that factories will eventually have to pass the higher costs on to consumers, hurting the economy. The role of speculators has been the subject of particular scrutiny by the authorities.

As China has stepped up efforts to curb inflationary pressures, the measures have had mixed results. On May 12, Chinese Premier Li Keqiang stepped up the rhetoric, urging the country to deal with soaring prices. Iron ore collapsed at the end of May following his comments, although it has since rebounded, and base metal prices remain much higher than last year despite a recent pullback .

Goldman Sachs said last month the country’s efforts are likely to be in vain as China is no longer the price-dictating buyer, with falling prices being an obvious buying opportunity.

China does not publish information on the volumes it holds in its state reserves, but the government is quietly setting aside raw materials to protect itself from price spikes. Equipment can be released in an emergency, as in previous cases of pork sales to calm inflation concerns due to a shortage of staple meat.

This is the first publicly announced copper release from Chinese state inventories since 2005, when Beijing sought to cushion local prices after bets by a government trader. Aluminum and zinc reserves were also sold in 2010. The lack of details on the volumes expected to be released this time around means it is uncertain whether this move will be effective in containing prices.

It is also unclear what may have triggered the Assets Commission ‘s latest order on overseas positions. The regulator has not ruled out other measures, including those targeting specific businesses under its control, the people said. A fax to the committee requesting comment was not answered.

The government had previously asked domestic companies, including steel mills, commodity traders and brokerage houses, to reduce bullish bets in local futures markets for highly volatile commodities like iron ore and coal. .

The expansion of surveillance suggests that Beijing is now seeking to exert some control over international benchmarks that influence commodity prices in China, as well as to deter speculation more generally among state-owned companies.