Iron ore futures continued to slide upon market fears of tougher and stringent checks on price information circulating in the market.
The futures of Dalian Commodity Exchange (DCE) for May delivery then dropped by 6.84% day-on-day or down RMB 57 to RMB 776.50/mt, during the day trading session on Monday.
The rebar futures also went down by 3.39% or down RMB 169 to RMB 4,817/mt, during the day trading session.
Tougher measures to curb market speculation
Market trade participants were spooked by Beijing regulators’ tougher crackdown on market speculation amid hyped up false prices’ information.
This came after two warnings from regulators in late Jan and early Feb, when Chinese trade participants returned for the week-long Lunar New Year holidays.
The Beijing policymakers had also planned to diversify their import dependence from Australian iron ore by other sources with long term plans targets of steel scrap, domestic iron ore and imported iron ore amounts by 2025, 2030 and 2035.
China to step up decarbonization effort
China’s ferrous scrap utilization aimed to reach 320 million mt per year by 2025, while the volume is expected to reach 270 million mt in 2021, with 230 million mt in the steel sector.
According to China Association of Metal Scrap Utilization, the higher utilization was part of the bigger country’s decarbonization efforts, as the country planned the utilization volume of secondary resources to reach more than 480 million mt per year by 2025, including 320 million mt of ferrous scrap, 20 million mt of nonferrous scrap and 60 million mt of wastepaper.
In the meantime, China is set to restrict the numbers of new capacity additions in the steel and aluminum industries, with focus on the introduction of advanced electric arc furnaces during the timeframe.