Recently, from the national development and Reform Commission, China will guide enterprises to use their own funds to build non-ferrous metal reserves. The aim is to establish a mechanism to help regulate supply and demand and stabilize prices.

In response to the "Guiding Opinions on Building a Good Market Environment to Promote the Restructuring of Non-ferrous Metals Industry and Promoting the Transformation and Increasing Benefits" issued by the General Office of the State Council recently, the NDRC said that the government would guide enterprises'capital, financial capital and social capital to establish reserves when the prices of non-ferrous metals are low.

It is reported that China is the world's largest consumer of commodities, in order to help the economy from capital-intensive to consumption-oriented transformation, the government is comprehensively promoting supply-side reform, and the establishment of metal reserves, digestion of domestic surplus raw materials, is also one of the supply-side reform initiatives. The State Council's guidance also includes measures to deal with overcapacity, encouragement of mergers and acquisitions, overseas investment and export of refined metals, and tax incentives for domestic miners.

As the world economy, especially China's economic growth, is experiencing difficulties, industrial commodity prices have fallen since 2011. At the end of 2015, metal prices fell to a low level for many years, prompting Chinese smelters to cut production.

According to the NDRC, the commercial reserve is the spontaneous behavior of the enterprise, and the types of reserve are determined by the reserve subject. For the purpose of preserving value and profitability, the enterprise operates on the basis of market-oriented self-financing funds. China's existing mechanism is to hold metal reserves through the State Bureau of material reserves.

The NDRC also said that China has been guiding and accelerating the structural reform of the supply side of the aluminum industry, and has achieved some results; with the elimination of backward capacity, the problem of oversupply has eased, and the utilization rate of capacity climbed to 80% last year.