China's main industrial commodities tumbled on Thursday after the government announced stepped-up measures to keep a lid on soaring raw material prices which threaten to undermine the country's economic recovery, Reuters reports.
Prices of key steelmaking ingredients iron ore and coking coal, as well as steel products such as rebar and hot-rolled coil, all swooned more than 5 percent as traders offloaded supplies and speculators placed short-sided bets that Beijing's measures will trigger a further pullback in metals markets.
China's cabinet announced on Wednesday that it will strengthen management of commodity supply and demand to curb "unreasonable" prices and investigate behavior that bids up commodity costs, spooking China's hoards of metal traders.
Analysts at ANZ said Steel and iron ore prices remain supported by strong seasonal demand, record high steel production, attractive steel margins and subdued supply.
"China'ss measures to curb steel production and exports were not much help in containing the price rise. Falling iron ore inventories reflect strong underlying fundamentals," ANZ said.
