China will crack down on regulatory violations to maintain order in the iron ore market, and will continue to strengthen supervision of the futures and spot market, its state planner said on Thursday.

The country will continue to pay close attention to the dynamics of the iron ore market, the National Development and Reform Commission (NDRC) said in a statement on its WeChat account that.

The state planner said it recently held a meeting with some futures companies to discuss iron ore market and price movement.

The companies attending the meeting said iron ore prices will face downward pressure following a rapid rise since mid-August when there was no big change in market fundamentals, according to the NDRC statement.

The most-actively traded iron ore futures contract on the Singapore Exchange climbed by 13.5% in the two weeks to Aug. 25 with physical prices for ore delivered to China rising by a similar amount.

The meeting was held on Thursday morning, said two analysts briefed on the meeting who spoke on condition of anonymity due to the sensitivity of the matter, while NDRC did not respond to a request from Reuters for comment.

The most-traded January iron ore futures prices on China’s Dalian Commodity Exchange ended Thursday daytime trading 1.9% lower at 836.50 yuan ($114.15) per metric ton as sentiment was soured by talk of the meeting.

In March and April, the state planner issued several similar warnings to step up supervision of iron ore markets.

China imported 106.42 million metric tons of iron ore in August, the highest since October 2020, customs data showed on Thursday.

China, the world’s largest iron ore consumer, buys 80% of the key steelmaking ingredient from abroad to meet its production needs.

Source: Reuters