China is buying 1.7 trillion pipes in 2017 and will continue to buy pipes as long as the demand for them is sufficient, according to a report from China’s Commerzbank and PNC.
The government has been buying up the pipes as a way to control inflation, which is currently running at 7.6 percent.
In the past, the Chinese government had to buy the pipes at a much lower rate to limit inflation.
This year, China is using the pipes to provide a much larger portion of its electrical power to its citizens, according a Commerzbank report.
With the pipes, China has an incentive to buy as many pipes as possible, Commerzer reported.
While Commerzebank said the Chinese purchase is not expected to affect prices in the domestic market, it expects a rise in prices in international markets as more pipes are added.
Commerzbanks data shows that the price of the pipes has risen by an average of 6.2 percent each year for the past seven years, while the average price of natural gas in 2018 was 4.5 percent higher than in 2017.
China’s average cost of building a pipe was 1,527 yuan ($3,955) in 2018, according the report.