In the past few days, there had been rampant market chatter the country’s State-owned Assets Supervision & Administration Commission (Sasac) asking SOEs to report their positions in commodity-based financial derivatives such as futures amid an ongoing push to reduce these exposures, sources said.
The volatile spot prices for key imported commodities such as iron ore and copper have caused the Chinese government to increase its scrutiny on markets this year, warning against the hoarding of material, manipulation of prices, and questioning key commodity producers closely on market practices.
High iron ore prices have been a key sore point for Chinese steelmakers, which frequently see margins eroded by the cost of steelmaking raw materials.
Hot metal costs increased by $66.34 per tonne on a daily average basis in May to $524.40 per tonne, according to Fastmarkets data. This caused the hot metal to hot-rolled coil spread in eastern…