BEIJING: China’s main industrial commodities tumbled on Thursday after the government announced stepped-up measures to keep a lid on soaring raw material prices which threaten to undermine the country’s economic recovery.
Prices of key steelmaking ingredients iron ore and coking coal, as well as steel products such as rebar and hot-rolled coil, all swooned more than 5 per cent as traders offloaded supplies and speculators placed short-sided bets that Beijing’s measures will trigger a further pullback in metals markets, report agencies.China’s cabinet announced on Wednesday that it will strengthen management of commodity supply and demand to curb “unreasonable” prices and investigate behaviour that bids up commodity costs, spooking China’s hoards of metal traders.
Analysts at ANZ said Steel and iron ore prices remain supported by strong seasonal demand, record high steel production, attractive steel margins and subdued supply.
“China’s measures to curb steel production and exports were not much help in containing the price rise. Falling iron ore inventories reflect strong underlying fundamentals,” ANZ said.
Beijing’s warning about overheated markets follows a 30%-40% climb in several critical steel and metal prices so far in 2021, fuelled by a synchronised recovery in China’s mammoth construction and manufacturing sectors from last year’s pandemic.