China's No.1 steelmaking city of Tangshan summoned local steel firms on May 14 to account for their actions of frequently lifting prices in recent days, which have far outstripped the increase in costs.
Steelmakers in the city were asked by local Market Supervision and Administration, Development and Reform Commission, Bureau of Industry and Information Technology to strictly follow price laws, strengthen self-discipline, and refrain from colluding with each other, fabricating and disseminating price hike messages.
China's steel prices have jumped far beyond the year-ago levels. Tangshan billet prices shot up by 84.8% from the preceding year and 13.7% from the month-ago level on May 13, market sources said.
Shanghai HRB 400 rebar (20mm) soared 70.5% from a year ago and 18.1% on the month, and Shanghai hot-rolled coil (3.0 mm) surged 89.4% year on year and 20.5% on the month.
Steel futures plummeted after the news was circulated in the market, suggesting the government has started taking actions to stabilize the market. The most-active rebar contract for October delivery on the Shanghai Futures Exchange fell 5.98% to 5,641 yuan/t ($875/t) on May 14.
The most actively traded iron ore on the Dalian Commodity Exchange, for September delivery, fell 7.49% to 1,173 yuan/t on the same day. The most traded coke futures for September contract slumped 6.44% to 2,614.5 yuan/t.
(Writing by Emma Yang Editing by Alex Guo)
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