MIIT: China’s commodity prices unlikely to see long-term rises

Wednesday, 21 April 2021 17:40:43 (GMT+3)   |   Shanghai

China’s Ministry of Industry and Information Technology (MIIT) held a press conference on April 20, at which Huang Libin, spokesman and director of its Operation Monitoring and Coordination Bureau, stated that the big rises in raw material prices have pushed up commodity prices, steel prices in particular, since the second half of last year. For instance, in the first two months this year, he noted, import iron ore prices rose by 56.6 percent year on year.

The MIIT official also said that downstream industries’ resumption of production resulted in tension between supply and demand in terms of raw materials.

Moreover, the relaxed monetary policy in China and positive global economic expectations have boosted activities in global futures trading, which has amplified the raw material price rise in the physical market.

However, MIIT does not think there is a foundation for commodity prices to indicate a long-term rise, as, for instance, high global indebtedness, the gap between the rich and the poor, and the aging problem will make a global economic recovery difficult. Moreover, China has ample space for macro-control policies and a sufficient domestic market, and so the negative influence of quick rises in raw material prices will be brought under control.

The MIIT official said that China will urge the relevant government departments to take active measures to stabilize raw material prices - including strengthening operations monitoring and price oversight, releasing information on time and guiding public opinion - to prevent market panic buying or hoarding. At the same time, MIIT will support enterprises both upstream and downstream to set up long-term cooperation relationships, responding to the risk of market price fluctuations, encouraging smelting enterprises and processing enterprises to carry out hedging transactions. 


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