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China will continue to organize the release of state reserves of copper, aluminum and zinc to further ease cost pressures, and commodity prices are expected to gradually return to a reasonable range, said Wan Jinsong, director of the Price Department at the National Development and Reform Commission at a briefing on Monday.

With the government's move to tame prices, the prices of steel, copper and aluminum fell by 3-14% from their peaks in May, which drove down the June PPI by 1.3 percentage points from the previous month, said Wan, adding that the NDRC will increase crackdowns on speculation and hoarding. Producer prices rose 0.3% m/m or 8.8% y/y in June.

Meanwhile, the NDRC will soon start the third batch of pork purchases for state reserves to curb the decline of live hog prices, said Wan, adding that the prices have rebounded significantly since end-Jun by more than 15% from the previous low.

Coupled with the decrease in the number of newborn piglets early this year, the price of live hogs may rebound in the near term, said Wan. June CPI decelerated to 1.1% y/y while falling 0.4% m/m mainly due to the plummeting pork prices in H1.