Iron ore price slides on Chinese regulatory crackdown worries

Production of steel castings. Stock image.

After last week’s rally, iron ore prices dropped on Monday on worries about further Chinese intervention in the market.

Talk in the market that China’s National Development and Reform Commission (NDRC) met with several futures companies in Beijing on Monday to discuss the iron ore market pressured prices, said analysts.

“Market sentiment is adversely affected by concerns over the government’s cracking down on speculative activities triggered by the news,” said Pei Hao, a Shanghai-based senior analyst from international brokerage firm FIS.

The state planner has already issued several warnings against hoarding and speculation in recent weeks, which it has blamed for rising prices.

The NDRC did not immediately respond to a request for comment on the meeting.

A forecast for rain and a drastic drop in temperature also impacted sentiment with the weather expected to hamper construction and impact downstream steel consumption.

Benchmark 62% Fe fines imported into Northern China fell 3.96%, to $122.45 per tonne.

The most-traded May iron ore futures contract on the Dalian Commodity Exchange ended daytime trading 2.04% lower at 890.5 yuan($129.27) a tonne, the lowest since March 29 following a near 5% jump in the past week.

(With files from Reuters)