Iron ore price plunges after China regulators’ new warning

The Dalian iron ore price dived more than 8% on Friday after China’s regulators and industry association issued warnings earlier in the week against recent unusual price moves of the key steelmaking ingredient.

Earlier on Friday, the National Development and Reform Commission (NDRC), which is the country’s state planner, said it and the market regulator would dispatch investigation teams to the commodity exchange and key ports to look into iron ore inventories and trading in the spot and futures markets.

The NDRC, which has issued three public announcements so far this year after iron ore prices surged more than 20%, said it had warned information providers that they should not fabricate any news or drive up prices, and pledged to crackdown on any irregularities.

The Dalian bourse, following the state planner’s statement, doubled transaction fees for some iron ore futures contracts. That move is effective on February 16.

Meanwhile, the China Iron and Steel Association, said on Friday night that it found some companies involved in iron ore businesses had “violated business ethics” by issuing and hyping fake information, which seriously disrupted market order and hurt the rights of the market participants.