According to a meeting organized by the National Development and Reform Commission and the State Administration of Market Regulation, the government will take measures to shorten the free storage period for iron ore traders and increase the costs of portside stockpiles.
The NDRC said Wednesday it would also guide efforts by port firms to ensure that commodity traders get their stocks back to a reasonable level as soon as possible.
They will also closely monitor price changes, strengthen market regulations and eliminate violations such as spreading misinformation and price gouging in the market.
Zhu Yi, a senior analyst in metals and mining at Bloomberg Intelligence, a market monitor, said the announcement will help stabilize the industrial chain and maintain market stability.
The announcements made by the Commission demonstrated the government's commitment to stabilizing the iron ore market, which is expected to help maintain market order and prevent misconduct by businesses.
Zhu said, “Iron ore prices may be under pressure this year as China's crude steel production is low and overseas mineral supplies are increasing. China's domestic iron ore production may increase by 4% this year as the government increases domestic production to reduce dependency on imports. " Said.
He said the proportion of steel produced by electric arc furnaces, which use scrap steel instead of iron ore consumed by blast furnaces as raw materials, could rise to 15 percent to 20 percent in 2025, compared to 9.2 percent in 2020.
According to Zhu, rising iron ore prices are in line with the rise in other mineral resources amid the global economic recovery since last year.
Improvement of global demand and supply disruptions caused by energy shortages has increased the prices of mineral resources. He said China's power outage and winter heating season production limits further tightened supplies of metals such as aluminum and steel.
The iron ore price increase has caught the attention of market watchers recently. The Commission and the China Securities Regulatory Commission have previously held discussions with iron ore-related companies, asking them not to corner iron ore goods or raise commodity prices.
In late January, the NDRC said that iron ore prices have increased due to market speculation as domestic inventories have remained high for years.
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