China warns of "zero tolerance" for commodity specs. who push up prices

London (Quantum Commodity Intelligence) - Amid fears of higher inflation pushing up global commodity prices, China's government on Monday said it would have "zero tolerance" for illegal trading activities and would actively investigate "abnormal transactions" in the spot and futures commodity markets.

In a statement, the National Development and Reform Commission (NDRC) said companies had a duty to "take the lead in maintaining market prices for bulk commodities" in a move that was targeted at the metals sector but will also alarm some traders of goods such as soybeans and LNG – both of which have seen prices soar this year.

"The prices of some bulk commodities have continued to rise sharply, and the prices of some have reached new highs, which has attracted widespread attention from all sides," the NDRC said in a statement.

"This round of price increases is the result of multiple factors, including international transmission factors, but also in many aspects that reflect excessive speculation, disrupting the normal production and sales cycle, and contributing to the price increase," it said.

The NDRC said after meeting other key government departments on Sunday, there would be a concerted attempt to "closely follow the trend of commodity markets" and punish "malicious speculation".

The statement comes as ferrous and non-ferrous metals prices have surged this year on a rise in consumer spending on pent up demand from 2020.

But it's not just metal prices that have spiked and the value of key agricultural goods and imported gas have also been soaring this year, fuelled by a shortage of supply of bulk grains and oilseeds in growing nations while a cold snap earlier this year has seen the price of liquefied natural gas hit record highs.