Chinese prices of steel and steelmaking ingredients slipped on Thursday after the cabinet announced tighter measures on the industrial commodities.
- Prices of iron ore, coking coal, rebar, and hot-rolled coil all fell by over 5%, as metal traders were worried by China’s crackdown on the industry.
- The cabinet a day earlier said it will boost its efforts on managing the commodity supply, and will end what is described as unreasonable prices of the commodity. It will likewise probe factors that bring up commodity costs.
- An analyst said the measures could have an immediate impact on the supply chain should the government choose to unload state reserves into the markets.
- Some of the measures may take a lag to be implemented, but are expected to sway prices once they take effect.
- Several steel and metal prices have already climbed by 30% to 40% this year, as China’s construction and manufacturing sectors recovered from the COVID-19 pandemic.