The Chinese metal industry asked to investigate the "malicious" short selling in the previous period.
According to Reuters, industry sources said that a major association in the Chinese metal industry asked the authorities to investigate the "malicious" short selling of metals on the Shanghai Futures Exchange. This is the latest sign that China, a major metal producer, is panicking about price declines.
Four sources said the call was made by the China Nonferrous Metals Industry Association and was supported by some large state-owned metal producers. Previously, metal prices in the Shanghai market fell to their lowest level since the 2008/09 global financial crisis.
At the same time as the price fell, last week's Shanghai Futures Exchange's open interest increased sharply, and the volume of several metals increased, prompting some producers to blame the short selling pressure on short selling.
"For malicious short selling, (we) will take action," one source said, this is an official of the China Nonferrous Metals Industry Association.
The official did not give details, including whether the association had complained to the regulatory body, the China Securities Regulatory Commission.
Another source was a private investment company executive who produces aluminum and sells aluminum, copper and zinc. He said the association recommended an investigation to the SFC.
The SFC did not respond to requests for comment. The association also did not comment.
This action highlights the growing tension between producers and investors. On the one hand, the current price has caused producers to suffer losses, while on the other hand, investors believe that China's economic slowdown and global metal oversupply are one of the reasons for the overall escape from industrial goods.
The second source said that the SFC earlier this month asked an international trading company to explain its aluminum futures positions; the company provided evidence that these short positions were hedged against metals delivered by Chinese refineries. End.
Due to event sensitivity, he did not specify the name of the business.
Shanghai's main aluminum SAFcV1 fell to a record low of 9,620 yuan per ton on Tuesday, and the total number of open positions hit a record because of the large number of short positions.
“Some manufacturers are asking to investigate malicious short selling... Nickel prices have fallen abnormally this week,” said a third source, a manager of a state-owned copper refinery.
The SFC had previously taken similar measures against stock market short selling.