China Launches New Rules, Commodity Trading In Danger! - Kakiforex.com - Financial Market Media No. 1 in the World China Launches New Rules, Commodity Trading In Danger! China Launches New Rules, Commodity Trading In Danger!
InstaForex

June 20, 2021

China Launches New Rules, Commodity Trading In Danger!

Commodity prices fell sharply after China unveiled new rules on the management of price indices for commodities and services on Thursday, as the government took steps to curb rising inflation.


The rules, which are expected to take effect from Aug. 1, will standardize how price indices are compiled and increase transparency on the production of information, the National Development and Reform Commission (NDRC) said on its official WeChat account.


Last week, the NDRC issued a statement to tighten monitoring of commodity prices and strengthen surveillance of the market.


This follows data showing the country’s producer price index reaching its highest level in more than 12 years in May, which was largely driven by rising commodity costs.



Under the new rules, price index providers will have to be independent of direct stakeholders in the commodity and services markets covered by the index. Information about the providers and methods used to develop and formulate the index should also be fully disclosed.


The commission also said authorities would have the right to review compliance and take disciplinary action for non -compliance.


Following this statement, commodity trading experienced a drastic fall on Thursday, particularly for palladium and platinum futures which fell more than 11% and 7% respectively. Meanwhile, copper -related futures declined 4.8%.


However, trading in this commodity rebounded on Friday, but still failed to erase previous losses, with palladium up 3% and platinum up around 2.6%.