LAUNCESTON, (Australia): China is once again trying to talk down the price of iron ore, with the state planner warning that market players “should not fabricate or publish any false price information.”
The problem for the authorities in Beijing is that iron ore prices seem perfectly capable of rallying on actual supply and demand fundamentals.
It’s not hard to see why Beijing wants to cool the price of the steel raw material, given the spot price of 62% iron ore for delivery to north China, as assessed by commodity price reporting agency Argus, is once again close to $150 a tonne, having gained some 68% since the 2021 low of $87, hit in mid-November.
While the close on Wednesday of $146.45 a tonne is still some way below the record high of $235.55 in May last year, it’s still at a level where China’s steel mills will be struggling for profitability and the costs of construction will be rising, putting pressure on both inflation and economic growth.
China’s state planner, the National Development and Reform Commission, and the State Administration for Market Regulation recently talked to iron ore price information providers, warning the firms to ensure accuracy of their releases, the regulator said in a statement on Wednesday.
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