What's going on?

China just announced it�s selling off a load of its industrial metals, as the rally in commodity prices continues to get the poor little guy down.

What does this mean?

Between widespread supply issues and a strong global economic recovery, commodity prices have been pushed to their highest levels in almost a decade. And China � by far the biggest consumer of raw materials in the world � has been trying to put an end to the rally, which risks both driving up global inflation and making China�s growth ambitions more expensive.

So now the government�s announced it�ll start selling major industrial metals � copper, aluminum, zinc � from the state�s own stockpiles. The hope is that the extra supply will reverse the commodities rally � particularly the more than 60% surge in the price of copper, which is essential to everything from transportation to infrastructure.

Why should I care?

For markets: The US crosses its fingers.
Whether China�s plan works depends on how much metal the country releases into the market. But if it does, it might cement the US Federal Reserve�s view that the spike in inflation is just a blip. That�s especially true after its chairman pointed to the recent plunge in lumber�s price as proof that commodity prices � and by extension inflation � will come down eventually. And since that means the central bank will be in no hurry to bump up its interest rates, that�s good news for investors everywhere.

The bigger picture: Root for the underdog.
Metal prices might soon drop off, but oil�s price rise is showing no sign of slowing down. It recently hit multi-year highs of above $70 a barrel, and now � thanks to underinvestment in supply and a recovery-driven surge in demand � the world�s biggest commodity trading firms are expecting that to reach $100.