The Chinese government is intensifying a weeks-long campaign to contain the rise in raw material prices. On Sunday, authorities convened the leaders of the largest metal producers.
After the meeting, Beijing threatened severe penalties for actions that further drive up the price of steel and iron, including excessive speculation, hoarding and spreading fake news.
Steel and iron prices fell in response to the message. The Chinese government fears that the expensive commodities could hinder the economic recovery or lead to higher prices for consumers.
Commodity prices have risen rapidly this year to almost the highest level in a decade. There are more and more signs that the recovery from the corona crisis is progressing well and that the demand for raw materials is growing.
It was previously announced that the Chinese central bank (PBOC) wants to keep the exchange rate of the yuan stable. That statement followed comments from a PBOC researcher who believed the country should allow the yuan to increase in value to compensate for the rising costs of raw material imports.