China warns against publishing false iron ore information amid rising prices

A man works to transport iron ore on a truck at Ganyu port in Lianyungang, Jiangsu province, China June 11, 2019. Picture taken June 11, 2019. REUTERS/Stringer

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  • Regulators talk to iron ore information providers
  • To sanction irregularities that drive up prices
  • Dalian iron ore futures down more than 5%

BEIJING, Feb 9 (Reuters) – China’s state planner warned against making iron ore prices on Wednesday, saying for the second time this year that regulators would study effective measures to ensure market stability in a context of rapidly rising prices.

The National Development and Reform Commission (NDRC) and the State Administration for Market Regulation recently spoke to iron ore price information providers, warning companies to ensure the accuracy of their publications, the regulator said in a statement.

“Associated companies (…) must not manufacture or publish false price information and must not drive up prices,” the statement said.

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The NDRC and the market regulator said they would strengthen market surveillance and strictly crack down on any irregularities.

Shanghai-based ferrous e-commerce platform said in a notice Wednesday morning that one of its previous releases mentioning a possible drop in iron ore shipments from Rio Tinto (RIO.AX) and from Atlas was not authorized by the two companies nor verified, calling it “false information” and claiming that the post had been deleted.

The state planner had issued a public warning in late January, saying the rapidly rising iron ore prices implied speculation as national stocks hit multi-year highs.

However, prices for key steelmaking ingredients remained bullish after the week-long Lunar New Year holiday. Benchmark iron ore futures on the Dalian Commodity Exchange hit a more than five-month high on Tuesday, sending their gains over 20% this year.

“It’s not that the authorities aren’t allowing any price gains, but not at such a rapid pace,” said Cheng Peng, an analyst at SinoSteel Futures, noting that mid- and high-grade ores were still relatively tight.

China has managed to cool coal prices in 2021, causing thermal coal futures prices to fall by around 60% from their all-time highs through a series of measures such as the price index review. and stimulation of national production. Read more

This rattled market sentiment despite the resumption of production at steel mills and hopes of downstream demand in the first quarter.

Dalian iron ore futures plunged as much as 5.8% in morning trading after the NDRC statement, posting the biggest percentage loss in more than two months.

China, the world‘s largest steel producer, imports more than 80% of the approximately 1 billion tonnes of iron ore it consumes each year.

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Reporting by Min Zhang, Albee Zhang and Gabriel Crossley; Editing by Kim Coghill and Gerry Doyle

Our standards: The Thomson Reuters Trust Principles.

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