NDRC: Beijing to safeguard commodities market stability

China's related governing bodies will intensify related surveillance to safeguard the stability of the commodities markets including steel, nonferrous metals and coal, Jin Xiandong, spokesperson of the country's National Development and Reform Commission (NDRC) commented when answering the media inquiry at the press conference on May 18.

"The recent sharp rises in some bulk commodity prices are mainly due to a few factors including the global bulk commodities prices rises, loose monetary policy and ample liquidity as well as the market optimism," he said.

"There are pros and cons to us (with the price rises), as this has led to higher profitability in the upstream industries and thus having lowered risks in debts, but manufacturers in the middle and downstream industries are facing higher operational costs, and lower margins," he added.

NDRC, together with the other related regulatory bodies has already adjusted the steel imports and exports policies and intensified the surveillance over the futures markets, and we will make the best of the resources in and out of China to guarantee the supplies, according to him.

Meanwhile, NDRC has joined hands with the State Administrating for Market Regulation in understanding the status quo of the steel and iron ore markets and the related industrial happenings, and "together with the related governing bodies, we will further intensify the monitoring, warning and supervision of the commodities market, and impose targeted measures to safeguard the market stability," he stated.

Iron ore has been one of the bulk commodities with serious price increases, and to this, Jin emphasized the importance of make the best of the resources in and out of China.

"Domestically, we will enhance the efforts in exploiting iron ore sources, accelerating developing new iron ore and replacement projects, and increasing steel scrap recycling, while globally we will encourage our enterprises with the bandwidth to invest in overseas iron ore mining projects and to expand iron ore import channels and sources to optimize the supply structure," he commented.

Bulk commodities prices have caught Beijing's attention with one of the major concerns being its impact on the downstream industries with the price gains especially the sharp increases after the Labour Day holiday, but starting May 13, steel prices have been on consistent declines in response to the comment by China's Premier Li Keqiang on May 12 on reining in on the bulk commodities prices, as reported.

As of May 18, China's national price of HRB 400E 20mm dia rebar under Mysteel's assessment, eased to Yuan 5,775/tonne ($870/t) including the 13% VAT, or down Yuan 573/t from the highest in record since the launch of the assessment on March 3 2011.

Mysteel SEADEX 62% Australian Fines index retreated from its record high of $233.7/dmt CFR Qingdao since the assessment on January 4 2010 on May 12 to $209.65/dmt as of May 14, though it rebounded to $223.05/dmt as of May 18.

Written by Victoria Zou, zyongjia@mysteel.com

This article has been published under an article exchange agreement between Mysteel Global and SteelMint.