Benchmark iron ore futures in China plunged more than 6% on Wednesday, snapping a five-session rally, after 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 release and should not fabricate or drive up prices.
The most actively traded iron ore futures on the Dalian Commodity Exchange DCIOcv1, for May delivery, dived as much as 6.2% to 779 yuan ($122.41) a tonne, the biggest percentage loss since Nov. 26. The contract closed 5.9% lower at 781 yuan per tonne.
“As authorities are paying close attention to iron ore, prices could weaken affected by market sentiment,” GF Futures analysts wrote in a note.
Other steelmaking ingredients also declined, with Dalian coking coal futures DJMcv1 falling 3.9% to 2,320 yuan a tonne, while coke prices DCJcv1 stepped back from gains in morning trade and ended down 1.5% to 3,026 yuan per tonne.
Construction material steel rebar on the Shanghai Futures Exchange SRBcv1 slipped 1.3% to 4,843 yuan a tonne.
Hot-rolled coils futures SHHCcv1 fell 1.2% to 4,980 yuan per tonne at close.
Shanghai stainless steel futures SHSScv1, for March delivery, rose 1.1% to 18,210 yuan a tonne.