BEIJING (Reuters) - China’s Ministry of Industry and Information Technology (MIIT) has pledged to strengthen its monitoring of the price of nonferrous metals such as aluminum in order to prevent “excessive” speculation that could distort the market.
In its annual review of the nonferrous metals sector, released Wednesday, the MIIT said it would work with nonferrous metals associations and relevant departments to help avoid speculation.
Shanghai aluminum prices have fallen by around 17 percent since September after a bull run during the first eight months of 2017 that saw the metal gain over 26 percent.
Last year’s rally came in the run-up to winter output cuts in top producer China, which ultimately turned out to be less severe than expected, weighing on prices. The winter restrictions are due to be lifted on March 15.
Other nonferrous metals such as copper and nickel have also attracted speculative bets on the Shanghai Futures Exchange, but aluminum featured most prominently in the MIIT statement.
The metal was listed as a priority for 2018, including implementing China’s aluminum smelting capacity replacement scheme, via the transfer of quotas and mergers and acquisitions, and speeding up the elimination of inefficient capacity.
China has been shuttering aluminum smelting capacity as part of supply-side reforms, and the MIIT said in January that Chinese aluminum firms that were entitled to replace capacity closed over the past seven years must do so by the end of 2018.
The ministry’s other priorities for this year included promoting international cooperation and the development and application of new nonferrous metal materials.
Reporting by Tom Daly; editing by Richard Pullin