Regulators direct industrial metals companies not to drive up prices

China’s market regulators warned industrial metal companies to maintain “normal market order” during talks on the significant gains in metals prices this year, the National Development and Reform Commission (NDRC) said on Monday, Reuters reports.

The NDRC, the top economic planner, along with the industry ministry, the state-owned assets regulator, the State Administration of Market Regulation, and the China Securities Regulatory Commission held the talks on Sunday with major domestic commodity companies and urged them not to drive up prices, according to the statement.

The talks follow a statement from China’s cabinet on Wednesday that the government would manage “unreasonable” price increases for copper, coal, steel, and iron ore. Those commodities, of which China is the world’s biggest user, have surged this year on rising demand as lockdowns to contain the coronavirus disease pandemic have eased and government stimulus has boosted consumer spending globally.

“This round of price increases is the result of multiple factors, including international transmission but also have many aspects reflecting over-speculation,” the NDRC said, adding that normal production and sales in the industry are disrupted.

The statement warned that companies “should not collude with each other to manipulate market prices … hoard goods and drive up prices.”

The regulators pledged they would monitor the commodity market and strengthen inspections for both futures and spot markets.

They will also crack down irregularities and malicious speculation.

Domestic industrial commodity prices plunged on Monday.

The most-traded Dalian iron ore futures dropped by 9.5 percent, while steel rebar and hot-rolled coil dived by 7 percent on the Shanghai exchange.

Copper and aluminium futures fell by 2 percent and 4 percent, respectively.

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