The government curbs commodity price speculation
China’s top economic regulatory agency stated that China will take more measures to curbs commodity price speculation and maintain price stability. Showing zero tolerance for illegal activities.
The National Development and Reform Commission held a meeting with four other central departments. Rapidly increase in commodity prices this year and warned key enterprises in the commodity sector to maintain normal market order.
Premier Li Keqiang held talks after presiding over an executive meeting of the State Council on Wednesday.
He called for a serious analysis of the reasons for the recent rapid rise in commodity prices, and to take targeted and holistic measures to ensure the supply of commodities and keep their prices stable.
The National Development and Reform Commission meeting stated that part of the reason for the recent increase in commodity prices. The transmission of global price increases, and excessive speculation has also pushed up prices. Require key industrial metal companies to promote the coordinated development of upstream and downstream industries and maintain a healthy industrial ecology.
The meeting said that regulators will closely monitor changes in commodity prices. Strengthen supervision of the futures and spot markets. They will also severely crack down on market violations such as monopoly in the commodity market. False information and hoarding behavior.
The news led to a sharp drop in domestic commodity prices on Monday with major iron ore futures contracts falling more than 5% and rebar down nearly 4%. According to data from Shanghai information provider Wind Info. Shares of steel-related companies trading in Shanghai and Shenzhen on Monday also fell 1.73%.
Zhou Maohua, an analyst at the Financial Markets Department of China Everbright Bank. “The government is actively formulating and deploying policies to ensure the supply and price stability of industrial raw materials. However, which will help stabilize the market and corporate expectations.”
Zhou said that although rising commodity prices have caused Chinese companies to increase production costs in certain mid- and downstream industries. The impact on consumer product prices has been limited.
“However, the government still needs to take measures to keep commodity prices stable. Greater efforts are needed to increase effective market supply, combat market irregularities. Increase financial and financial support for some companies with greater potential and severely affected by the disaster. “
Experts say that this round of price increases is the result of a combination of many factors
especially excessive market speculation. The latest talks between the government and key companies have demonstrated its determination to curb market violations and maintain stable commodity prices.
Tao Jin, deputy director of the Macroeconomic Research Center of the Suning Institute of Finance. The government’s continuous efforts to maintain price stability will encourage raw material companies in the upstream industry to increase production.
Tao said: “Efforts should be increased to increase curb domestic supply and encourage Chinese industrial metal companies to cooperate with overseas entities.”
Wu Chaoming, chief economist of Chase Securities, said that this round of commodity price increases may reach a high in the third quarter, and then prices will fluctuate at a high level.
In order to better respond to this situation, companies should take measures. Such as increasing support for technological innovation, reducing the use of raw materials. Furthermore, Improving the efficiency of the use of materials and encouraging the use of alternative materials.