China: "Strict Punishment for Raw Material Speculators... Applying Zero-Tolerance Principle"

[Photo by Reuters Yonhap News]

[Asia Economy Reporter Park Byung-hee] The Chinese government warned on the 24th (local time) that it will crack down on speculative forces driving up raw material prices.

According to Bloomberg News, the National Development and Reform Commission (NDRC) of China issued a statement on the same day warning that it will apply a zero-tolerance policy and severely punish speculative forces disrupting the raw material market. It also stated that acts such as purchasing and stockpiling raw materials for speculative gains and spreading false news will be strictly punished.

After the NDRC's statement was released, steel prices fell by more than 5%, and the price of iron ore, a raw material, dropped close to the price limit.

Li Ye, an analyst at Shanghai-based Senin Wanguo Futures, explained, "Government intervention affected market sentiment, causing prices to fall." He added, "Recently, raw material prices have risen sharply, causing damage to manufacturers."

Bloomberg explained that the Chinese government began warning about rising raw material prices since April, and the NDRC's statement on this day represents the firmest stance taken by the Chinese government so far.

It is interpreted that the Chinese government took a tough stance due to the recent surge in prices.

China's Producer Price Index (PPI) for April rose 6.8% year-on-year, marking the highest increase since October 2017. This is a 2.4 percentage point increase compared to the March PPI growth rate. As a result, concerns have grown that inflation could become a stumbling block for China's economic recovery in the future.

This content was produced with the assistance of AI translation services.