The price of steel has fallen sharply after China said it would focus on cooling prices, warning of “excessive estimates” as concerns rise over rising prices.
The National Development and Reform Commission, China’s economic development agency, said on Monday it would help regain markets in the retail market, spread false information and covert coverage.
The stock was hit in the markets on Monday with a futures metal contract that fell 7% on Chinese exchanges at Dalian with Rmb1,049 ($ 163) per tonne. Iron has lost about a quarter of its value since it was struck good news earlier this month. An aluminum deal later in July came down 3% on the Shanghai exchange.
The Chinese government’s statement expresses its growing concern rising commodity prices, which has been affected by the industrial revolution in the country since the epidemic. The prospect of a global economic recovery has also added fuel to prices.
“I think there is a lot of evidence of damage,” said Robert Rennie, a market chief at Westpac, who said the intervention from Beijing was appropriate. He was more courageous than the Chinese and wanted to pursue global interests then he was a woodcutter, he said.
China is the world’s largest consumer of goods and commodity prices go up until prices have been set. The inflation rate in the country is up 6.8% per annum in April after a sharp fall in 2020.
In a statement to China’s largest steel producers, the NDRC said inflation was linked to factors such as “excessive speculation” and warned businesses to stay out of the market.
Last week, the state-run CCTV broadcaster mentioned a meeting of state councils, chaired by Prime Minister Li Keqiang, which said it should be done to prevent a rise in retail prices that pass through consumer prices. The comments helped sell items on Thursday.
Consumer prices in China remain low compared to the manufacturing prices, while consumer demand remains for industry to resume. CPI increased by 0.9% per annum in April.
China’s economy came to fruition last year. In 2020, it released a large amount of iron as part of industrial activity since the coronavirus became alarmed, which began to grow and increase the demand for iron ore from Australia.
To try The structure of a small carbon steel, part of an effort to achieve new environmental goals, contributed to inflation earlier this year in anticipation of delivery challenges.
“One of the reasons you may be worried about hiding right now… Chinese officials have been telling companies that they want to reduce the production of metals,” Rennie said.