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BEIJING: China’s government watchdogs warned industrial metals companies to maintain “normal market order” during talks on significant gains in metals prices this year, the National Development and Reform Commission (NDRC) said on Monday.

The NDRC, China’s top economic planner, along with the industry ministry, state-owned assets regulator, markets regulator and securities regulator, held the talks on Sunday with major domestic commodity companies and urged them not to drive up prices.

The talks follow a statement from China’s cabinet on Wednesday that the government would manage “unreasonable” price increases for copper, coal, steel, and iron ore.

Those commodities, of which China is the world’s biggest user, have surged this year on rising demand as lockdowns to curb the COVID-19 pandemic have eased and government stimulus has boosted consumer spending globally.

The NDRC statement warned that companies “should not collude with each other to manipulate market prices ... hoard goods and drive up prices,” adding that the price increase was a result of multiple factors, including from overseas, but also reflected over-speculation.

Normal production and sales in the industry are disrupted, it added.

The regulators pledged they would strengthen inspections of both futures and spot markets, while cracking down on irregularities and malicious speculation.

Ge Honglin, head of the China Nonferrous Metals Industry Association, said separately that while some people maintain the price jump was market-driven, most believe the time had come for the government to take action.

“The supply and demand aspects of nonferrous metals have not changed and the cost does not support such a large price increase,” Ge said in comments reported on the association’s WeChat account. Some institutions are still trying to push up profits but they underestimate the government’s regulation policy, he added.

Chinese industrial commodity prices plunged on Monday, with Dalian iron ore futures dropping as much as 9.5% before closing down 5.2%.

In Shanghai, steel rebar and hot-rolled coil closed down 3.6% and 3.9%, respectively, while copper fell 1.4% and aluminium slumped 3.5%.

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