The Chinese government, responding to strong iron ore and copper demand, is promising to punish speculation, market manipulation, and spreading false information leading to a price increase in key raw materials.
In a meeting with the nation’s top metals producers on Sunday, China’s National Development and Reform Commission (NDRC) and four other regulators met with the manufacturers imploring them not to increase prices. The commission added in a statement today that there will be zero tolerance towards malicious speculation.
Media reports, citing Alicia Herrero, chief economist for Asia Pacific at Natixis, indicated that regulators are worried over commodities being used as collateral for leverage. Moreover, price increases feed inflation and China’s central bank is trying to avoid rate hikes.