China investigates commodity prices and supplies

The pricing department of China’s National Development and Reform Commission (NDRC) and the country’s market regulator have sent teams to various Chinese provinces and cities to investigate bulk commodity prices and supplies.

The NDRC, China’s state planner, has been heavily involved in efforts to tame high prices for commodities from coal to copper that have squeezed manufacturers’ margins in the world’s second-biggest economy. China’s factory gate prices in May rose at their fastest annual pace in more than 12 years.

“The working groups will learn more about … bulk commodity spot market transactions and carefully listen to feedback from midstream and downstream companies” on supply levels and price fluctuations, the NDRC said in a statement on Wednesday.

They will also listen to suggestions on how to combat speculation – after speculative buying on commodity exchanges partly fuelled the price rally – and ensure supply, it added.

The latest NDRC statement comes after it said on Monday that it was investigating iron ore spot market transactions with the State Administration for Market Regulation. The two bodies last week jointly launched similar measures to examine coal pricing.

China is the world’s biggest consumer of both coal and iron ore, for which prices hit record highs last month.

In an effort to stabilise metal prices, China’s state reserves administration, under the NDRC, on Tuesday said it would sell copper, zinc and aluminium early next month in the first round of a rare release of stockpiles.

The state planner is also issuing new rules on the management of price indexes for commodities from August to improve transparency.
Source: Reuters (Reporting by Shivani Singh Additional reporting by Tom Daly Editing by Christopher Cushing and David Goodman)

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