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Commodity prices are on the slide today after China announced a new crackdown on ‘speculators and hoarders’ to deflate the boom in raw materials.
Following a meeting with China’s big metals producers, China’s National Development and Reform Commission issued a stern warning against commodity price manipulation.
The NDRC warned that against “excessive speculation” and hoarding of raw materials, and pledged to show “zero tolerance” for monopolies in the markets.
Pointing to the recent jump in raw material costs, the NDRC said:
“This round of price increases is the result of multiple factors, including international transmission but also have many aspects reflecting over-speculation.
It also warned that companies “should not collude with each other to manipulate market prices [or] hoard goods and drive up prices,”, pointing out that the surge in commodity prices are disrupting normal market order.
The NDRC is China’s top economic planner, and the move signals that Beijing is intensifying its efforts to cool soaring prices which are driving up costs across the world.
The move is having an immediate impact on the commodity markets, with with iron ore on China’s Dalian exchange plunging by almost its daily limit of 10%.
That extends its recent declines, having soared to record highs earlier this month.
Steel and copper prices have also dropped, as traders digested the move.
Last Wednesday, China’s cabinet said the government would manage “unreasonable” price increases for copper, coal, steel, and iron ore.
“China’s authorities continue to raise concerns about the rise of commodity prices, raising concerns that they may tighten regulations,”
Elsewhere, the crypto market had a torrid weekend. A fresh wave of selling send bitcoin down over 16% at one stage on Sunday towards the $31,000 mark, although it’s now risen back to over $36,000 this morning.
This latest selloff came after Beijing pledged to crack down on bitcoin mining and trading activities as part of efforts to fend off financial risks.
With bitcoin having slumped over 40% since last month’s record high of $64,000 last month, and other digital assets also sliding, some enthusiasts have abandoned the market, says Kyle Rodda of IG:
After a brief bounce off last week’s multi-month lows, some of the paper-handed types have seemingly sold-out just passed their breakeven, or decided to pack it in and cut their losses, as Bitcoin’s momentum, and the speculative mania that drove it, almost entirely disappears.