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China's NDRC vows to stabilise steel supply and prices
February 15, 2017 / 11:13 AM / 8 months ago

China's NDRC vows to stabilise steel supply and prices

BEIJING (Reuters) - China’s state planner said it will take steps to boost the supply of steel to stabilise physical and futures prices, the latest sign Beijing is concerned that efforts to curb pollution are roiling some of the country’s biggest industries.

An employee works at a steel factory in Dalian, Liaoning Province, China, July 4, 2016. China Daily/via REUTERS

The National Development and Reform Commission (NDRC) reiterated its push for steel makers in the world’s top producer to boost output of high-quality steel used in the construction industry, the agency said in a document posted in the Shandong NDRC’s website.

The NDRC also asked big steel mills to sell their metal at “reasonable” prices and serve as a benchmark for the market.

The agency said it will crack down on illegal futures trading to stabilise market expectations and will vet illegal hoarding and the spreading of market rumours, it said.

The most-active Shanghai rebar futures prices SRBcv1 tumbled 0.8 percent on Wednesday to close at 3,391 yuan (432 pounds) per tonne, after touching a two-month high earlier.

Investors have piled into steel and iron ore futures betting on higher prices as Beijing tries to tackle pollution and cut excess steel supply by shutting capacity.

The comments come after the government tried to curb activity by speculators in China’s commodities markets.

Last November, the government warned that surges in everything from steel to rubber to eggs were driven by speculators and not justified by fundamentals.

China’s three major exchange hiked fees and introduced trading limits, among other measures, to stymie the rallies.

($1 = 6.8685 Chinese yuan renminbi)

Reporting by Meng Meng and Josephine Mason; Editing by Christian Schmollinger

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