Prices of bulk commodities in China including copper, aluminum and steel are returning to their “rational” levels after a series of efforts by the related governing bodies, Meng Wei, spokesperson of China’s National Development and Reform Commission (NDRC), commented when answering a media inquiry at the NDRC’s press conference on June 17.
“Prices of some bulk commodities such as iron ore, finished steel, and copper have dropped by varying degrees after the implementation of a series of measures, and the frenzy of speculative trading has eased,” she said, acknowledging that, “the matter has been of common interest lately, as some bulk commodity prices had risen substantially in the past few months, with the pace of growth (being) far from reflecting the changes in the fundamentals.”
To cool down the overzealous pricing of such commodities, Beijing has taken several steps including removing the tax rebates on some steel exports, urging key coal producers to increase production as far as possible without compromising safety, and reviewing excess steel capacity cuts to prevent recurrences.
At the same time, the Chinese authorities have intensified their surveillance over market prices, conducting related market studies via summits with relevant industrial enterprises and associations, and offering aid to the privately-owned, and small and micro enterprises, Meng added.
On top of all the efforts, China’s National Food and Strategic Reserves Administration also announced a plan on June 16 to release some copper, aluminum and zinc reserves from government warehouses, she noted.
These would be made available to middle- and downstream processing and manufacturing plants to guarantee them industrial materials supplies at affordable prices, Meng explained, saying that the reserve administration may make such releases frequent in the future should the market situation call for such moves.
As of June 17, China’s national price of HRB400E 20mm dia rebar was assessed by Mysteel at Yuan 5,136/t ($797/t) including the 13% VAT, or down substantially from the recent high of Yuan 6,348/t on May 12 before the series of moves were taken.
Written by Hongmei Li, li.hongmei@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
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