Benchmark iron ore on the Dalian Commodity Exchange for September delivery surged 45.3% to 1,106 yuan per tonne.
Chinese rebar and hot-rolled coil futures also jumped after the market recorded heavy losses over the past few weeks following the government’s vow to stabilise commodity prices.
Last month, officials in Tangshan warned its steel mills to maintain market order and safeguard companies’ normal operations.
The local government there said it would look into illegal behaviour including market manipulation and hoarding, and would punish and suspend businesses found guilty.
Fundamentals
Iron ore prices could drop back to around $140 per tonne by end-2021, and $120 per tonne by end-2022 as the market shifts into a surplus, according to Capital Economics’ latest report.
“While China’s announcement that it will crackdown on speculation and market irregularities has taken some of the froth out of the iron ore market in recent weeks, we think the price of iron ore will ultimately be driven even lower by less favourable fundamentals over the rest of the year”, the research consultancy says.
($1 = 6.3636 Chinese yuan renminbi)
(With files from Reuters)
