Everything They Can Get Their Hands On. Manic Metals Report 03/06/2025

Forget the trade wars metals exploded yesterday as it appears that China wants to buy everything, they can get their hands on well at least when it comes to the commodities markets. Explosive moves and industrial metals along with a sudden resurgence in  silver is being driven in part by reports that China is going to make major purchases of commodities and refill their reserves.

Reuters reported that China said on Wednesday it would accelerate the annual stockpiling of strategic fuels, food and other commodities. In a report on Wednesday, China’s state planner said it would steadily advance the construction of storage facilities for grain, petroleum and other commodities. “We will move faster to fulfil the yearly task of stockpiling strategic goods as we work to expand the scale of reserves,” the report said.

The world’s largest consumer of raw materials, China is very secretive about the size and extent of its vast network of reserves, although analysts estimate they contain hundreds of millions of tons of metals, grains, meat and crude oil.

China’s strategic petroleum reserve (SPR) was estimated at 290 million barrels last July, although private estimates vary widely, and China tightly guards information about the subject.  The planner also said it would refine the planning systems for the exploration, production and storage of strategic minerals.

It is very interesting that China is talking about expanding their strategic petroleum reserve. They are e also going to go on to a buying binge when it comes to different commodities from grains and everything else.

I think the main commodity that it’s going to impact on is metals and copper. Bloomberg reported that Copper prices jumped by more than 5% in New York — leaping further above other global benchmarks — as US President Donald Trump suggested imports of the metal could be subject to a 25% tariff. Trump’s comments — made in a speech to Congress Tuesday — sparked a frenetic rally in Comex copper prices in Asian hours as traders reacted to the possibility that levies could be larger than expected, and come much sooner.

Last week, Trump announced that the Commerce Department would undertake a sweeping investigation that may lead to copper tariffs on national security grounds. That triggered a sharp rally in Comex prices, widening the gap with equivalent prices in London and Shanghai.

It could take months for the department to decide whether tariffs should be imposed, but Trump suggested Tuesday that he’d already enacted a 25% levy. He previously signed an order to impose tariffs at that level on aluminum and steel, due to kick in March 12.

“A 25% tariff was clearly not what the market was expecting before those comments, and now traders are scrambling to price in the correct level,

The Trump administration is also talking about building a minerals reserve in the copper reserve because the market is really controlled by China.

Is Platinum undervalued? Kitco Metals investors should expect to see significant and entrenched structural supply deficits in the platinum market for the foreseeable future as recycling and mine production cannot keep up with solid consumption, according to the latest report from the World Platinum Investment Council. The platinum market is expected to see a supply deficit of 848,000 ounces this year, compared to last year’s deficit of nearly one million ounces, the WPIC said on Wednesday in its quarterly and 2024 year-end demand trends report. This is the third year the platinum market has recorded a significant deficit. For 2025 demand, the WPIC said that automotive sector demand is expected to remain fairly stable this year, totaling 3.102 million ounces, down slightly from 3.12 million reported in 2024.

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