Commodity prices fell sharply after China launched new regulations against price index management for commodities and services on Thursday, when the government was taking steps to withstand inflation.
The rule, which is expected to take effect from 1 August, will standardize how the price index is structured and enhances transparency on the production of information, the National Development and Reform Commission (NDRC) in the official Wechat account.
Last week, the NDRC issued a statement to tighten monitoring of commodity prices and strengthened the market.
This is a follow-up data showing that the producer price index in the country reaches the highest level over the past 12 years in May, which is largely driven by rising commodity costs.
Based on new rules, pricing index providers need to be free from direct stakeholders in the commodity and services market covered by the index. Information on providers and methods used to expand and formulate indexes should also be fully disclosed.
The commission also said the 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, especially for Paladium and Platinum futures which fell more than 11% and 7% respectively. While copper-related futures dropped 4.8%.
However, this commodity trading recorded an increase on Friday, but still failed to remove previous losses, with a 3% rising paladium and Platinum rose about 2.6%.
