Chinese regulators held meeting on iron ore market, urged futures companies against driving up prices

 

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The price department of the National Development and Reform Commission (NDRC) and the futures department of the China Securities Regulatory Commission (CSRC) recently held a meeting to discuss the iron ore market situation, according to a statement released by the NDRC.

The regulators urged futures companies to step up compliance review of research reports, comprehensively and objectively analyse market situation, not to conduct one-sided interpretation of policies, not to play up the atmosphere of price hikes, to step up risk warning for investors, remind investors to make rational investment and not to conduct excessive speculation, it said.

The authority will closely monitor the iron ore market, step up regulation on both futures and spot iron ore markets and crack down on illegal activities to safeguard the normal market order, it said.

The companies attending the meeting said iron ore prices will face downward pressure following a rapid rise since mid-August when there was no big change in market fundamentals, according to the NDRC statement.

The most-actively traded iron ore futures contract on the Singapore Exchange climbed by 13.5% in the two weeks to Aug. 25 with physical prices for ore delivered to China rising by a similar amount.

The meeting was held on Thursday morning, said two analysts briefed on the meeting who spoke on condition of anonymity due to the sensitivity of the matter, while NDRC did not respond to a request from Reuters for comment.

The most-traded January iron ore futures prices on China’s Dalian Commodity Exchange ended Thursday daytime trading 1.9% lower at 836.50 yuan ($114.15) per metric ton as sentiment was soured by talk of the meeting.

In March and April, the state planner issued several similar warnings to step up supervision of iron ore markets.

China imported 106.42 million metric tons of iron ore in August, the highest since October 2020, customs data showed on Thursday.

China, the world’s largest iron ore consumer, buys 80% of the key steelmaking ingredient from abroad to meet its production needs.