China Reduces Port Iron Ore Storage Space... Full Effort to Control Inflation

Despite 160 Million Tons of Iron Ore Stock, Price Anomalies Lead to Strict Prevention of Hoarding
Coal Index and Spot Price Gap Monitored... Severe Punishment for Coal Price Falsification

[Asia Economy Beijing=Special Correspondent Jo Young-shin] The Chinese government is expected to take measures to reduce the iron ore storage space at ports in order to stabilize iron ore prices. This aims to prevent artificial price hikes by blocking iron ore stockpiling. Additionally, monitoring of coal prices will be further strengthened. These measures are interpreted as the Chinese government's determination to control manufacturing costs.

Photo by Global Times capture

According to China Economic Net and Pengpai on the 24th, the National Development and Reform Commission (NDRC), which oversees China's economic planning, pointed out on the 18th that despite iron ore port inventories reaching 160 million tons, prices are still rising. The NDRC had warned iron ore-related companies on the 9th, together with the State Administration for Market Regulation, that any artificial price increases would be severely punished.

China Economic Net reported that iron ore futures prices surged from a low of 509.5 yuan per ton in November last year to 849.5 yuan per ton on the 11th, marking an increase of over 60% in just two months.

Hu Qimu, chief researcher at Sinosteel Economic Research Institute, explained, "Imported iron ore is mainly stored at ports," adding, "When some companies stockpile iron ore at ports, it can create the illusion of a shortage in the physical market."

China Economic Net stated that to prevent hoarding of iron ore, authorities will implement a series of measures to reduce the storage space available to companies for piling up iron ore. The media also forecast that firm measures will be taken to maintain market order.

Liu Xiangdong, deputy director of the China International Exchange Center, an economic advisory body to the Chinese government, said, "Iron ore prices tend to be monitored during the distribution stage, which often leads to hoarding behavior," and emphasized the need for a series of measures to reduce the storage space available to importers and shorten inventory periods.

The NDRC also pointed out issues with coal prices and announced plans to strengthen price monitoring. The NDRC warned that there is a gap between some coal price indices and spot prices and vowed to take firm action against illegal and unlawful activities.

The NDRC reported that recent monitoring of the coal market revealed acts that fuel price increases, such as announcing prices for coal that is not traded. It also explained that abnormal issues were confirmed through on-site monitoring, including announcing coal prices without verifying actual transaction prices, publishing prices exactly as quoted by some traders at inflated levels, and deliberately delaying the announcement of price information. The NDRC reiterated its warning to crack down on and punish the fabrication of coal prices.

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