(Bloomberg) -- China is preparing to snap up a record volume of cobalt for its state reserves this year, with prices of the battery material languishing near their lowest levels since 2019.

The National Food and Strategic Reserves Administration — which oversees the country’s official commodities stockpiles — is preparing to buy around 15,000 tons of refined cobalt, according to people familiar with the matter, who declined to be named.

The purchases could begin in the coming month and the price of the tender is expected to be between 200,000 yuan and 220,000 yuan a ton, the people said. That equates to about $12.5 to $13.8 a pound. 

The National Food and Strategic Reserves Administration didn’t respond to a faxed request for comment. The planned purchases were reported earlier by Reuters.

The metal used in everything from electric-vehicle batteries to aerospace alloys has slumped to five-year lows amid booming production in Democratic Republic of Congo and Indonesia, where it’s a by-product of copper or nickel mining. China accounts for about four fifths of global refining.

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China’s state stockpiler — previously known as the State Reserve Bureau — manages inventories of everything from crude oil to pork and copper, and its purchases of commodities can have a material impact on price. It bought a total of 8,700 tons of cobalt last year, according to an estimate from specialist trading house Darton Commodities.

A worldwide glut widened to about 14,200 tons in 2023, the Cobalt Institute and researcher Benchmark Mineral Intelligence wrote in a recent report. They predicted the surplus will remain in the short term as supply growth outpaces demand.

Battery materials have suffered broad declines in the past year. Cobalt is also among metals considered “critical” by Western nations trying to loosen China’s supply-chain dominance and avoid future shortages. 

Earlier in May, a senior US official accused China’s CMOC Group Ltd. of using “predatory” tactics to depress prices by flooding the market with cobalt from DRC mines. CMOC, which last year overtook Glencore as the world’s top producer of the metal, said in March that its DRC mines will produce 60,000 tons of cobalt this year.

--With assistance from Annie Lee and Mark Burton.

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