Iron ore futures dipped from recent rally, as Beijing policymakers stated to bring price stability from market malpractices like ‘excessive hoarding’.
The futures of Dalian Commodity Exchange (DCE) for May delivery then inched down by 0.78% day-on-day or down RMB 5.50 to RMB 700/mt, during the day trading session on Wednesday.
The rebar futures also dropped by 0.71% or down RMB 34 to RMB 4,786/mt, during the day trading session.
Chinese authority to cramp down on market hoarding
China’s National Development and Reform Commission (NDRC) announced on Wednesday, that the market regulators will prevent like ‘excessive hoarding’ of iron ore and bring down the high port inventory to a reasonable level.
According to SteelHome consultancy, the country’s port stocks of imported iron ores reached record-high volume at 160.95 million mt as of Feb 18, almost a four-year high as port inventory kept building up since the start of the year.
Hence, NDRC met with the industry players in a symposium to tackle the high stockpiles, then preventing the false price information fabrication to ensure price stability.
Global crude steel production dips in January
The global crude steel output dipped by 6.1% year-on-year to 155 million mt in January 2022, according to the World Steel Association.
The dip followed lower steel production from China at 81.7 million mt, down 11.2% yearly, due to less steel consumption from the country’s debt-ridden property sector.
In the meantime, India, the second largest producer of steel, maintained its high steel output at 10.8 million mt, up 4.7% yearly in January 2022, due to better steel demand in automotive, infrastructure and construction sectors.