China is committed to freeing up metal reserves to address price and shortage fears.

Industrial metals are in the spotlight after Chinese authorities made a promise to release government reserves to address concerns about shortages and high prices.

The national food and strategic reserves administration said in a statement Wednesday that it would release lots of metals, including copper, aluminum and zinc, that would make them available to producers.

The move comes amid government concerns over a rally in commodity prices, which has pushed back factory door prices to the highest since the 2008 financial crisis and threatened to squeeze out industry profits.

It marks the latest effort of Chinese policy makers to lower commodity prices. Last month, China’s economic planning agency warned of “excessive speculation” and promised to tackle the spread of false information and hoarding.

Local media outlets said Wednesday that Beijing had ordered state-owned enterprises to limit their exposure to overseas commodity markets.

Metal prices initially fell on Tuesday, following speculation that China may be prepared to release reserves. On Wednesday, copper reference prices fell 0.2 percent to $ 9,500 per tonne, while aluminum fell 0.4 percent to $ 2,458 and zinc fell 1.75 percent one hundred to $ 2,978.

Metals have led a broad-based rally in world commodity prices, initially stimulated by China’s rapid recovery and driven by pandemic industry, and have skyrocketed even more as other major economies begin to grow. The industry, used in everything from electric vehicles to home cable, hit a record high of $ 10,500 a tonne last month.

China does not officially disclose its state-owned metals reserves to the industry, which holds them as insurance against price spikes.

Based on the difference between net supply and consumption, analysts say Beijing could have accumulated 500,000 tons of copper, 1.5m of aluminum and up to 700,000 tons of zinc. However, they warned that these were only informed assumptions. To put these figures into perspective, China consumes about 15 million tons of copper a year.

Colin Hamilton, an analyst at BMO Capital Markets, said it was unlikely that China would release significant amounts of metal to the market.

“I think this is another piece of rhetoric to send to the Chinese market that they think prices should be lower,” he said. “They hope the market comes out on its own.”

The government’s warning last month about speculation in commodity markets has pushed up prices, sending iron ore prices 10 per cent lower. By 2020, China’s record volumes of steel and mills have remained active, despite a push to limit production over environmental concerns.

China’s ambition of zero zero carbon emissions by 2060 will require cuts to metals production, adding to concerns about potential shortages and helping fuel higher prices. The country’s role as a major exporter of metals, as well as the world’s largest consumer and producer of raw materials, has added to these concerns.

Last month, the Chinese government released a draft regulation requiring energy-intensive projects to assess its carbon emissions.

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