The iron ore price retreated on Wednesday, snapping a five-session rally, after Chinese authorities pledged to strengthen supervision of the market and crack down on any irregularities.
The state planner and market regulator said in a statement they had warned iron ore information providers to ensure the accuracy of their releases and should not fabricate or drive up prices.
The most actively traded iron ore futures on the Dalian Commodity Exchange, for May delivery, dived as much as 6.2% to 779 yuan ($122.41) a tonne, the biggest percentage loss since November 26. The contract closed 5.9% lower at 781 yuan per tonne.
According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China were changing hands for $146.49 a tonne during morning trading, down 2% compared to Tuesday’s closing.
Prices in Singapore fell to about $144/t from a high of $153/t on Tuesday, the strongest intraday level since the end of August.
“As authorities are paying close attention to iron ore, prices could weaken affected by market sentiment,” GF Futures analysts wrote in a note.
A Shanghai-based ferrous e-commerce platform, Esteel.com, said in a notice on Wednesday morning that one of its previous releases mentioning a possible decline in iron ore shipments from Rio Tinto and Atlas was not authorised by the two companies nor verified, calling it “false information” and saying the post had been taken down.
The iron ore price surged past $150 a tonne on Tuesday as China offered its huge steel industry five extra years of rising carbon emissions.
Steelmaking accounts for about 15% of China’s carbon emissions. On Monday, the government set 2030 as the new deadline for peak emissions for the sector, against an earlier target of 2025.
(With files from Reuters and Bloomberg)