The question for the market is will Beijing’s efforts will bear fruit this time? Or is Monday’s slump just another blip and China is still unable, or unwilling, to take actions that will force iron ore prices meaningfully lower?
China’s economic planner, the National Development and Reform Commission, said on Monday it and the market regulator are jointly looking at the iron ore market and will crack down on hoarding and speculation.
The regulators said China, the world’s biggest importer of iron ore, will closely monitor spot trading prices and investigate malicious speculation in a timely manner. They will “strictly punish and disclose” irregularities such as hyping prices and hoarding, according to a statement.
The announcement had the desired effect of knocking the wind out of iron ore prices, with the most-traded September contract on the Dalian Commodity Exchange ending 8.8% lower on Monday at 1,121 yuan ($173.31) a tonne, a three-week low.
China’s December aluminium production grows 4.2%, leading to 2024 output to 1 million tonnes shy of the production cap
