Crackdown over Steel Price Speculation Continues in China
Chinese regulators warned the country's major commodity companies and industry associations against excessive speculation and the spread of
Chinese regulators warned the country's major commodity companies and industry associations against excessive speculation and the spread of disinformation. According to a notice released by China’s National Development and Reform Commission, state regulators summoned major commodity companies and industry associations in the iron ore, steel, copper and aluminium sectors on supply and price stability and warned against excessive speculation and the spread of disinformation. They vowed to keep a close eye on commodity price movements, and step up inspections on the commodity futures and spot markets. They also pledged to implement zero tolerance on illegal activities, enforce monopoly agreements, and crack down on spreading disinformation and hoarding in the industry.
Multiple factors have fuelled a price rally among commodities in China since the beginning of the year. While acknowledging the transmission of global price rises, regulators pointed to excessive speculation in the industry. China Iron & Steel Association said that steel prices, driven by robust domestic demand, rising raw material costs and a global easing of liquidity, surged in April & May but now demand will weaken over the coming period as construction activities slow during the rainy season while the autos and home appliances sectors are also entering their off-peak season. CISA on its official WeChat account said “From the domestic situation, the supply and demand sides of steel products did not show overall or trending changes, steel prices do not have the basis for sustained and substantial increases.”