China seen suspending copper purchases, buying zinc

China's State Reserves Bureau could have suspended planned copper purchases due to rising prices, an official aware of the government's plans and a producer said on Monday, but zinc buying will resume this week.

'We previously had a plan to build up copper reserves but it now seems we've had to suspend it,' said the official, adding, 'It's because of the price,' without elaborating.

Copper prices on the London Metal Exchange and Shanghai have risen since Beijing indicated it would buy base metals reserves in December. However LME copper, which had been up 13 percent this year, slipped 6 percent on Monday due to doubts about Chinese purchases.

Producers were also sceptical the government would buy copper in the short term.

'Copper prices have risen. The SRB of course won't follow the price. They can just wait for a while,' said Pan Qifang, spokesman for Jiangxi Copper Co Ltd, the country's top copper producer.

Shanghai's most active copper futures contract, for April delivery, rose 1,180 yuan to 28,190 yuan ($4,123) on Monday, despite talk that the SRB had cancelled the copper buying plan.

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