CHINA’S State reserves administration said Tuesday that it would publicly auction a total of 100,000 tons of nonferrous metals early next month in the first round of a rare and highly anticipated release of its stockpiles.

The National Food and Strategic Reserves Administration said in three separate notices that it would auction 20,000 tons of copper, 30,000 tons of zinc and 50,000 tons of aluminum July 5-6.

The amount of zinc being sold is equivalent to 5.7 percent of monthly production in China, the world’s biggest metals consumer, based on official data for May. For copper, the auctioned volume is 2.3 percent of May’s refined output and for aluminum it is 1.5 percent.

The release of State metal reserves in China is one of a number of attempts by the government to cool a stellar rally in commodity prices that has squeezed manufacturers’ margins.

Benchmark copper prices hit a record of almost US$10,750 a ton last month, fueled by a post-pandemic economic recovery, ample global liquidity and pockets of speculative buying, but have since eased to around US$9,260.

“We expect more sales from reserves combined with slower underlying demand and seasonal weakness to put a lid on prices in the very near term, but we then expect a rally to new highs over the next three months and beyond,” Jefferies analyst Christopher LaFemina said in a note.

“We would be surprised if the administration were to sell more than 10 percent … of its copper reserves,” he added, estimating these to total 1.5 million to 2 million tons.

The copper and zinc sales will take place on an online platform belonging to State-owned miner and metals trader China Minmetals Corp., while the aluminum auction will be on a site operated by another State-run firm, Norinco, the notices show.

The bidding hours will be from 8 a.m. to 12 p.m. (0000-0400 GMT) and 1 p.m. to 6 p.m. (0500-1000 GMT). It was not immediately clear what the starting price in each auction would be.

Companies wishing to bid must be involved in processing and manufacturing and should register on the e-bidding platforms by 4 p.m. June 27, the notices said.

Breakdowns of the batches of copper, zinc and aluminum to be sold showed all of the metal had entered storage after 2008 and was currently located in warehouses across China.

Bidders are able to inspect the quality of the metal in warehouses June 30 and July 1 provided they have put down a deposit and arranged a viewing.

(SD-Agencies)