Commodity prices in China have boosted to record highs

Prices in China for commodities, including iron ore, steel rebar, coal, and copper, have boosted to record highs this month, prompting the government to step in to curb unreasonable price rises for consumers.

Undoubteadly, Asian giant, China has been the main driver of global metal markets for over a decade.

From the start of the year through mid-May, prices for China’s steel rebar, hot-rolled steel coil, and copper rose more than 30% as a revival in construction and manufacturing supercharged demand in the world’s biggest metal consumer.

Meanwhile, vital industrial inputs, such as iron ore, thermal coal, sulphuric acid, and glass, also witnessed double-digit gains to all-time highs as overall consumption growth outpaced supply.

China’s economic rebound accelerated sharply in the first quarter from a COVID-induced slump earlier last year. The gross domestic product had a record 18.3% increase.

Additionally, output of metals from steel to copper and aluminum boosted solidly year on year. Refiners, smelters, and fabricators churn out intermediate metals goods used by manufacturers.

With rising raw material prices sparking fears of inflation, the government has urged coal producers to increase output. Meanwhile, they are vowing to investigate behavior that bids up prices. The national cabinet pledged to manage commodity supply and demand. This includes stockpiling and reinforcing inspections on the spot and futures markets.

China has sharply boosted consumption of iron ore and other steel ingredients

According to Fastmarkets MB Benchmark, 62% Fe fines imported into Northern China (CFR Qingdao) were changing hands for $211.85 a tonne, down 2%.

September iron ore on the Dalian Commodity Exchange was trading 5.7% lower at $177.40 a tonne.

Rebar on the Shanghai Futures Exchange dropped 4.7%, hot-rolled coil fell 4.5%, while stainless steel sank 2.8%. Dalian coking coal plunged 8%, and coke dropped 4.8%.

The world’s largest producer of steel products has sharply boosted consumption of iron ore and other steel ingredients. Meanwhile, it has been ramping up output for use in producing home appliances and construction materials amid robust demand driven by global stimulus measures.