China’s state planner warned on Wednesday against fabricating iron ore prices, saying for the second time this year that regulators would study effective measures to ensure market stability amid fast rising prices.
The National Development and Reform Commission (NDRC) and the State Administration for Market Regulation recently talked to iron ore price information providers, warning the firms to ensure accuracy of their releases, the regulator said in a statement.
“Related companies … should not fabricate or publish any false price information and should not drive up prices,” the statement said.
The NDRC and market regulator said they would strengthen market supervision and strictly crack down on any irregularities.
A Shanghai-based ferrous e-commerce platform, Esteel.com, said in a notice on Wednesday morning that one of its previous releases mentioning a possible decline in iron ore shipments from Rio Tinto and Atlas was not authorised by the two companies nor verified, calling it “false information” and saying the post had been taken down.
Public Warning
The state planner had issued a public warning in late January, saying the rapidly rising iron ore prices involved speculation, as domestic inventories stood at multi-year highs.
However, prices for the key steelmaking ingredients remained bullish after the week-long lunar new year holiday. Benchmark iron ore futures on the Dalian Commodity Exchange scaled to over a five-month high on Tuesday, sending their gains to more than 20% this year.
“It’s not that authorities don’t allow any price gains, but not in such a fast pace,” said Cheng Peng, an analyst with SinoSteel Futures, noting that medium- and high-grade ores were still relatively tight.
China managed to cool coal prices in 2021, striking thermal coal futures prices by some 60% from their historical highs via a raft of measures such as probing the price index and boosting domestic production.
That dented market sentiment despite recovering production at steel mills and downstream demand hopes in the first quarter.
Dalian iron ore futures plunged as much as 5.8% in morning trade following the NDRC statement, logging the biggest percentage loss in over two months.
China, the world’s top steel producer, imports more than 80% of the roughly 1 billion tonnes of iron ore it consumes each year.
- Reuters with additional editing by Jim Pollard
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