China Launches Probe Into Commodities Amid Surging Prices
China’s top economic planner and market regulator have jointly launched a probe into supplies and prices of commodities, in the country’s latest efforts to rein in the recent sharp rally in prices and curb speculation.
The National Development and Reform Commission (NDRC) and the State Administration for Market Regulation recently dispatched teams to various provinces and cities to investigate spot and futures trading in commodities, according to a statement (link in Chinese) released by the NDRC on Wednesday.
The teams are also looking into upstream supply and price fluctuations faced by downstream industries that produce the finished goods that are sold to consumers, as well as seeking opinions on combating speculation and ensuring market supply, according to the statement.
Commodity prices have surged this year in China, with aluminum and copper futures contracts on the Shanghai Futures Exchange rising to the highest levels in a decade or longer.
In an effort to arrest the price surge, China announced Tuesday it will release copper, zinc and aluminum from its national strategic reserves for the first time in more than a decade.
Concerns have increased in China and overseas that the world is entering a period of rapidly accelerating inflation, as global demand recovers from the pandemic more quickly than supply in the wake of unprecedented fiscal stimulus measures and lax monetary policies in major developed countries.
The government is growing worried that the run-up in raw material costs will eventually hit consumers’ pockets, dent spending and hurt the profits of companies, especially those in downstream industries, dealing a blow to its virus-hit economy.
Recently, the NDRC and market regulator have probed the iron ore spot market (link in Chinese) and coal prices (link in Chinese), pledging to closely monitor commodity prices and crack down on hoarding and speculation.
In May, the State Council, China’s cabinet, put forward measures (link in Chinese) to stabilize commodity prices, including raising steel export tariffs and canceling tax rebates for some exports to ensure domestic supplies, as well as lowering the import duty on a range of raw materials to boost supplies.
Contact reporter Luo Meihan (firstname.lastname@example.org)
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