Iron ore prices plunge on govt regulation fears

SHANGHAI, Jul 5 (SMM) – Dalian iron ore prices fell sharply in the morning trading hours on Friday July 5, following news that Chinese authorities will investigate the recent surge in iron ore prices and target price manipulation. 

The most-traded September iron ore contract on the Dalian Commodity Exchange lost more than 3% as of CST 10:45 on Friday July 5, to a low of 838 yuan/mt, extending overnight declines that ended six consecutive trading days of increase. 

Higher prices of iron ore and falling prices of steel erode margins at steelmakers and damage sustainable development of the industrial chain, said Qu Xiuli, vice-president at China Iron Steel Association (CISA), 

Speaking at the 4th China Iron & Steel Financial Derivatives International Conference in Shanghai on Friday July 5, Qu said related authorities have been highly concerned about the recent sharp increases in imported iron ore prices, and will take immediate steps to regulate the market. 

Supply woes and greater demand were believed to have bolstered iron ore prices recently, according to an iron ore market symposium held on June 27.