China orders ports to stop stockpiling iron ore

In Business Resources, China, Featured Home Page News, Harmonisation, Momentum

Beijing is attempting to cool iron ore prices, as the National Development and Reform Commission met with port operators this week to prevent the “excessive hoarding” of iron ore in a move aimed at significantly cutting stockpiles.

Key Points: 

  • Regulators in China are determined to crack down on price speculation.
  • Beijing is driving up demand by instituting another construction and infrastructure spending boom in a bid to stimulate the slowing economy.
  • China in a plan to break Beijing’s dependency on Australia wants to boost domestic iron ore production by 30 per cent, ramp up investments in overseas mines and strengthen scrap steel recycling.

The Tourism News Related Stories

Related China: China suppressing Hong Kong’s independent news outlets

Related Business Resources: If Russia invades Ukraine, how will it affect Australia?

from AFR 24.2.22

Tokyo | China’s powerful state planner has ordered the country’s major ports to prevent the “excessive hoarding” of iron ore in a move aimed at significantly cutting stockpiles in Beijing’s latest bid to cool iron ore prices.

The National Development and Reform Commission met with port operators this week and urged them to increase the turnover of stockpiled iron ore in its latest push to tackle price speculation and hoarding.

A ship unloads imported iron ore at a storage yard of Taicang Port in Taicang, Jiangsu Province of China.  Getty

“The meeting studied measures including greatly shortening the free storage period of iron ore for traders, increasing the cost of port hoarding, and preventing excessive hoarding,” the NDRC said in a translated copy of a statement posted on social media on Wednesday.

The NDRC also asked port operators not to stockpiles iron ore with the aim of driving up prices.

Iron ore prices retreated on Wednesday following two days of gains due to investor concern about Chinese government intervention.

The NDRC’s statement followed its meeting with the market regulator to introduce measures which would shorten the free storage period for iron ore. It came as Bloomberg reported China was looking to set up a single, state-backed platform for purchasing iron ore, which would give it greater control over prices.

Analysts in China said the current iron ore port inventory was 160 million tonnes and the latest move by the NDRC could see this reduced to 120 million to 130 million tonnes.

The state planner has made six statements since late January aimed at curbing price speculation. There was a sell-off in iron ore last week after the state planner and the market regulator told some iron ore traders to release excess inventory and reduce stocks to reasonable levels following a joint investigation in Qingdao, one of the country’s largest iron ore ports.

Tackle speculation

The NDRC on Wednesday reiterated its push to tackle speculation.

“The National Development and Reform Commission and the State Administration of Market Supervision pay close attention to changes in iron ore prices, and will work with relevant departments to further strengthen market supervision, resolutely and severely punish violations of laws and regulations such as fabricating and spreading information on price increases, hoarding, and driving up prices,” it said in a statement.

Rio Tinto this week reported a $US21.4 billion ($29.6 billion) underlying profit, the second biggest in Australian corporate history behind BHP’s 2011 result, partly on the back of record iron ore prices.

While regulators in China are determined to crack down on price speculation, Beijing is driving up demand for the steelmaking commodity by backing another construction and infrastructure spending boom in a bid to stimulate the slowing economy.

China said last year it wanted to boost domestic iron ore production by 30 per cent, significantly ramp up investments in overseas mines and strengthen scrap steel recycling under a plan designed to break Beijing’s dependency on Australia. However, those signals have done nothing to dampen China’s short-term enthusiasm for iron ore.

A slowdown in China’s GDP growth to 4 per cent in the fourth quarter has alarmed Beijing, which is again shelving concerns about debt to focus on growth.

The Chinese government will announce its official annual growth forecasts when Communist Party leaders meet in Beijing in two weeks for the National People’s Congress.

You may also read!

Immerse yourself in Kakadu’s Indigenous culture at the Mayali Mulil Festival

“Connect with our culture, our environment and our spirit” is the message of the Indigenous Traditional Owners of Kakadu’s

Read More...
Jetstars $22 domestic sale

Huge jetstar sale

Jetstar has dropped a 4-day sale for fares to the Sunshine Coast from just $60* Over 20,000 sale

Read More...

Gold Coast Beer & Cider Festival

After being forced to postpone by last year’s pandemic, the inaugural Gold Coast Beer & Cider Festival will now take place

Read More...

Mobile Sliding Menu