China to strengthen raw material price supervision, crack down on speculators

China will take steps to stabilise raw material prices and strengthen supervision of the market after a spike in prices for commodities such as steel, nonferrous metals and petrochemicals, the country’s industry ministry said on Tuesday.

Rising commodity prices – driven by higher raw material costs, a recovery in downstream demand and speculation from the financial market – have increased Chinese manufacturers’ costs and squeezed margins, Ministry of Industry and Information Technology spokesman Huang Libin said at a press conference.

“This round of commodity prices rise has had impact on the manufacturing sector but is manageable overall,” Huang said.

Growth in China’s output of home appliances such as air conditioners, refrigerators and washing machines, and machineries has “largely” outpaced increases in steel, copper and aluminum production, tightening the supply-demand balance, he added.

The ministry will work together with relevant departments to stabilise prices, fend off panic buying or hoarding and “resolutely” crack down on market monopoly and malicious speculation, Huang said, without elaborating.

China’s imports of iron ore and copper concentrate, the key raw materials for steel and copper production in the world’s top metals consumer, jumped around 8% year-on-year in the first quarter, customs data show.

Import prices for the two feedstocks, however, surged 65.8% and 37.9%, respectively, over the same period.

The industry ministry encourages smelters and fabricators to hedge on the futures market, he added. Futures prices for all key industrial metals have gained more than 17% so far in 2021.

(By Lusha Zhang, Min Zhang and Tom Daly; Editing by Andrew Heavens)