The Chinese authorities have decided to fight “speculators and hoarders” whom they believe are guilty of the recent surge in commodity prices, in particular for iron ore. According to Bloomberg, a meeting of government officials, regulators and leading steel companies was held yesterday in Beijing, at which representatives of the National Development and Reform Committee (NDRC) declared their intolerance to monopolistic behavior and hoarding. The agency notes that at the meeting, the authorities announced their intention to severely punish those whom they consider guilty of gouging stock prices for raw materials, “excessive speculation” and the spread of fake news.
On May 10, futures contracts rose 10% on the Dalian Commodity Exchange and other Asian exchanges. The rise in prices led to a surge in quotations of major iron ore producers. Western analysts and the media explained this by the fact that iron ore is rising in price against the backdrop of the recovery of the global economy and growth in demand in China. However, the Chinese authorities seem to have a different opinion.
“As regulatory policy shifts towards more government intervention, prices will become more susceptible to market sentiment,” Li Yi, an analyst at Shanghai brokerage company Shenyin Wanguo Futures, quoted Bloomberg. to losses and defaults. ” At the same time, the NDRC states that leading enterprises “must fulfill their social obligations … not to face each other to manipulate prices, fabricate and disseminate information that leads to higher prices, and not to accumulate.”