China’s state planner said on Tuesday it would take measures to stabilise steel and iron ore market, and that it expects growth in the country’s factory gate prices to ease in the second half as commodity prices return to taking cues from fundamentals.
Pandemic-driven stimulus measures have driven up commodity prices recently, boosting profitability for upstream companies but hurting downstream manufacturers’ performance, Jin Xiandong, spokesman for the National Development and Reform Commission (NDRC), said at an online briefing.
China’s producer price index (PPI) expanded at the fastest pace in more than three years in April, fuelled by a sharp jump in ferrous metals, oil and others.
“Affected by global prices and lower year-ago bases, PPI growth could further expand in coming few months,” Jin said.
But PPI is expected to cool in the second half with commodity prices “gradually back to the supply and demand fundamentals”, Jin added.
The state planner said it was working together with the market regulator to look into the steel and iron ore market, where prices have soared 30-40% in 2021.
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