Home WORLD China Shows “Zero Tolerance” for Commodity Hoarders Business and Economic News

China Shows “Zero Tolerance” for Commodity Hoarders Business and Economic News



China has stepped up its fight against soaring commodity prices by convening senior executives to a meeting that threatened severe penalties for violations ranging from excessive speculation to spreading false news.

The National Development and Reform Commission said that after leaders of top metal producers met with various government departments in Beijing on Sunday, the National Development and Reform Commission stated that the government will show “zero tolerance for monopolistic behavior and hoarding behavior.” “. Efforts to curb the surge in metal prices fluctuated across the market, with steel prices falling by 6% and iron ore prices falling to close to daily increases. Before prices stabilize.

The NDRC’s warning came as commodity prices rose sharply, heightening concerns that rising inflation could affect economic growth in China and other regions. Investors have bet on industrial metals and that the world will rebound strongly from the epidemic, but as manufacturers are forced to increase the cost of finished products, concerns about the ripple effect of demand are increasing.

Amelia Xiao Fu, Head of Global Commodity Strategy, BOCI Investment Co., Ltd., said on the phone in London: “It may not be a good thing for the speculation community, but it is not a good thing for the world as a whole. That’s good news.” “I think the price may calm down and the room for excessive rebound may be limited.”

The government’s warnings about the consequences of commodity prices have continued, approaching the highest level in the past decade. However, apart from changing the trading rules of the futures exchange, not much action has been taken. Citigroup Inc. said in a report that Beijing may face “potential policy options” to limit the gains.

When targeting commodity prices, when the world economy restarts under the condition of elongated supply chains, the relevant departments are fighting against trends, and they can only partially control these trends. The government is also dealing with the consequences of its own efforts to reduce greenhouse gas emissions, which have led to price increases.

Li Ye, an analyst at Shanghai Shenyin Wanguo Futures Co., Ltd., said: “As policy risks shift to government intervention, prices will definitely be affected by market sentiment.” “The rapid rise in commodity prices has seriously affected manufacturers and market orders, resulting in losses. And breach of contract.”

The National Development and Reform Commission’s statement is the government’s harshest comment so far, and the government began to warn of rising raw material prices in April. Officials from iron ore, steel, copper, and aluminum companies met with five state agencies in Beijing on Sunday. They were told that excessive speculation and rising international prices were to blame for the recent rise.

The National Development and Reform Commission said in a statement that key enterprises should “actively fulfill their social responsibilities” and take the lead in maintaining market order. “Don’t collude with each other to manipulate prices, fabricate and spread information about price increases, and don’t hoard and raise prices.”

In recent weeks, policymakers have paid unusually high attention to commodities. In April, factory prices in China rose at the fastest rate in more than three years, raising concerns that expensive raw materials may hinder economic recovery or lead to higher consumer prices.

The deputy governor of the People’s Bank of China assured the renminbi in a statement on Sunday that it is “basically stable” after another central bank official said that the renminbi should appreciate to offset the increase in the cost of goods imports. The official’s comment was later deleted.

The impetus to cope with the increase in material prices came after the rebound in China’s V-shaped demand last year helped trigger global commodity increases. However, stimulus support for metal-intensive industries is showing signs, and the authorities are now beginning to worry about import inflation.

Beijing is also partially solving its own manufacturing problems, which is most obvious in steel. After the government set targets to curb output and ordered a decline in output this year, prices soared to record highs. Instead, production surged to record levels in April.

Atilla Widnell, managing director of Navigate Commodities, said: “In another week, the Chinese government issued another statement trying to alleviate the self-injury caused by the regular announcement of steel capacity reforms, which stimulated Steel prices and profit margins.”

Chinese rebar futures closed 2.7% lower. Hot rolled coil and iron ore also fell. Iron ore fell more than 7% before the decline narrowed.

Mix base metals. Lead, tin and zinc on the London Metal Exchange fell. Copper, which fell 0.9% earlier, rose 0.8% to $9,962 per ton at 3:51 pm London time. Prices fell by 3.5% last week, the highest level since September.

– With the assistance of Annie Lee (Annie Lee) and Yvonne Yue Li (岳丽).


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