(Yicai) Nov. 24 -- Chinese regulators will continue to strengthen supervision of the spot and futures markets to crack down on violations amid a surge in iron ore prices.

Companies should not fabricate and spread information about price markups, deliberately imply price hikes, stockpile for higher prices, inflate prices, speculate, or manipulate the futures market, the National Development and Reform Commission said yesterday after meeting with officials from the State Administration for Market Regulation and market watchdogs under the China Securities Regulatory Commission.

The most-traded iron ore futures contract on the Dalian Commodity Exchange closed down 0.9 percent after falling as much as 2 percent yesterday, following the regulatory warning. The contract had climbed about 17 percent over the past month and 57 percent since bottoming out in late May.

The NDRC, SAMA, and CSRC have joined hands to jointly and more tightly regulate the iron ore market than before, which may damp down speculation, Wang Yingguang, a senior analyst at Lange Steel, told Yicai.

The latest round of rapid price hikes in iron ore futures began in late October, as import prices rose sharply and remained above USD125 per ton.

High prices are squeezing downstream profits. Prices are unreasonable, and China needs to make more effort to improve the pricing system of raw materials, Guo Bin, general manager of Chinese miner Sinomine Resource Group, said at the China International Import Expo earlier this month.

The China Iron and Steel Association pitched a plan to the government last year to enhance resource security, suggesting that China started with three major areas -- overseas mines, domestic mines, and scrap steel -- to reduce the country’s high dependence on imports over 10 to 15 years.

Editors: Tang Shihua, Futura Costaglione