Monday, October 2, 2023

China steps up surveillance of iron ore market

China has announced a crackdown on regulatory violations to maintain order in the iron ore market. According to the state planner, supervision of the futures and spot markets will be strengthened.

Careful market observation

The National Development and Reform Commission (NDRC) stressed that it will continue to pay special attention to the dynamics of the iron ore market. In a statement on his WeChat account, the state planner reported a recent meeting with some futures companies to discuss market movement and iron ore prices.

Companies attending the meeting said iron ore prices could face downward pressure after a rapid rise since mid-August. Interestingly, this price increase was not supported by any major changes in market fundamentals, according to the NDRC statement.

Price fluctuations

The most actively traded iron ore futures contract on the Singapore Stock Exchange rose 13.5% in the two weeks ended August 25. Physical prices for ore shipped to China saw a similar increase. The meeting took place Thursday morning, according to two analysts briefed on the meeting. However, the NDRC did not respond to a request for comment from Reuters.

According to rumors about the meeting, January iron ore futures prices on China’s Dalian Commodity Exchange closed the day down 1.9%, settling at 836.50 yuan ($114.15) a ton .

Previous alerts and important information

In March and April, the National Development and Reform Commission issued several similar warnings about the need for increased supervision of the iron ore market. Additionally, it highlighted that China imported 106.42 million tons of iron ore in August, the highest since October 2020. It is important to note that as the world’s largest consumer of iron ore, China purchases 80% of this vital iron ore input for steel production abroad .

Nation World News Desk
Nation World News Desk
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