Yesterday seasonal cooling on the iron ore market, today a different picture emerges. Chinese regulators startet an investigation and kept an eye on the spot iron ore market on Monday. They are looking for price gouging and hoarding. The background is that prices have risen sharply. And base metals, such as nickel, aluminum and tin, have picked up. In addition, China’s NRDC has announced new price monitoring measures effective August 1, 2021.
Spot prices and futures on the upswing
Chinese spot prices in base metals are mostly up today. And stainless steel and nickel futures on the SHFE are also up. Stainless steel up over 2% and nickel up over 3.5%. Chinese stainless steel spot prices have also risen by as much as 1.5%.
Aluminum futures on the SHFE have risen about 1.6% and tin is also up as much as 1.9%.
Nickel on the LME is up nearly 3.5% since yesterday afternoon, joining its Asian counterpart on the SHFE.
Source: shfe.com.cn, lme.com, dce.com.cn
Chinese regulators launch investigation into spot iron ore market
While yesterday there was talk of seasonal cooling in the Asian iron ore market, today the real reason for the decline in iron ore is likely to become clear.
DCE iron ore futures down as much as 9% on Monday
Chinese government regulators intervened on June 21, 2021, and announced that they would put the iron ore spot market under observation regarding the sharp rise in prices. As a result, iron ore futures on the Dalian Commodity Exchange fell by up to 9%.
Action against price gouging and hoarding
At the same time, regulators announced that they will investigate not only price changes but also abnormal transactions and malicious speculation in a timely manner. Price gouging and hoarding of iron ore will be punished if necessary, and good market order will be maintained.
China announces new administrative measures effective August 1
China’s National Development and Reform Commission (NDRC) has announced that new administrative measures for the price index behavior of major goods and services will be introduced from August 1, 2021. In doing so, the NDRC aims to ensure that key price indices cannot be maliciously manipulated by market participants.
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