As global metal demand fluctuates as a result of the pandemic’s impact on various industries, the Chinese government is urging its mining sector to pay no attention to the price inflation and speculation on metal demand.
This was announced during an industry meeting held by the country’s National Development and Reform Commission and other state bodies. Various private aluminum, iron and steel producers attended the meeting and were urged to not drive the prices of metals higher. The price of metals such as aluminum and copper has grown significantly this year. While this increase in price isn’t solely linked to Chinese companies, the country’s government is still focused on ensuring that Chinese entities work to restrict further inflation of prices.
After the meeting, the National Development and Reform Commission issued a statement that emphasized the need for mutually beneficial cooperation and strong legal compliance. In the statement, the agency notes that crucial enterprises should maintain a good industry ecology, promote the development of downstream and upstream industries, and carry out their social responsibilities while also improving their positions.
The commission then added that industry associates shouldn’t hoard products to prompt an increase in prices, spread false information about price surges or conspire with each other to influence market prices. The statement also notes that industry associations and firms will work towards standardizing operation behaviors and production in conformity with the statement’s requirements, adding that these companies will also make positive contributions to developing a stable price order and market, adhere to compliance and legal operations, and perform their social responsibilities.
Additionally, the body revealed that as part of the government’s zero-tolerance approach to illegal works, authorities would be allowed to penalize activities such as spreading false information.
This announcement may have caused a drop in the price of both aluminum and copper, which shows the influence China has on the global metals industry. A report by the World Steel Association shows that while international production of steel decreased last year, steel production in China increased, bringing the total to more than a billion tons, which made up nearly 57% of the total steel produced worldwide.
Despite this announcement, however, the country’s long-term ambitions remain unclear, which doesn’t seem to be in agreement with its productivity. Earlier this month, China revealed its plans to stop trading under the China-Australia Strategic Economic Dialogue. Concurrently, the country also introduced global cooperation work, which proposes a simultaneous expansion of and decline in the country’s global influence.
Price stability is actually good for everyone, and players in the global metals sector such as First Energy Metals Ltd. (CSE: FE) (OTCQB: FEMFF) could benefit from predictability in the trend of metals prices.
NOTE TO INVESTORS: The latest news and updates relating to First Energy Metals Ltd. (CSE: FE) (OTCQB: FEMFF) are available in the company’s newsroom at https://ibn.fm/FEMFF
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