China may not build up steel reserves - paper

China is likely to give up a plan to build up state reserves in steel as the government and industry association have found it to be an impractical task, state media reported on Wednesday.

Beijing is taking advantage of a collapse in energy and commodity prices to stock up reserves in various metals such as aluminium, as well as cotton, rubber and crops.

Li Yizhong, head of the Industry and Information Technology Ministry, floated the idea last month of buying up steel products for reserves in an attempt to help the country's steel mills.

But after discussing the plan, it appeared there were minimal chances of putting it into action, the official Shanghai Securities News cited unnamed government officials as saying.

The difficulty was deciding the volume and type of steel products and which firms to buy from, it said.

The government would need to spend at least 20 billion yuan ($3 billion) to soak up 5 million tonnes of steel, only 1 percent of China's annual steel production.

China's steel price has fallen more than 50 percent this year as consumption from the country's auto and shipmaking sectors slowed sharply.

China is likely to give up a plan to build up state reserves in steel as the government and industry association have found it to be an impractical task, state media reported on Wednesday.

Beijing is taking advantage of a collapse in energy and commodity prices to stock up reserves in various metals such as aluminium, as well as cotton, rubber and crops.
auto and shipmaking sectors slowed sharply.

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