Chinese authorities said they will prevent excessive hoarding of iron ore to keep its price stable, stabilize the industrial chain and ensure the market remains stable.

The government will come up with measures to shorten the free storage period for iron ore traders and boost costs of port-side inventories, according to a meeting held by the National Development and Reform Commission and the State Administration for Market Regulation.

The NDRC said in a statement on Wednesday that it will also guide efforts by port firms to ensure that traders of the commodity bring inventories back to a reasonable level as soon as possible.

They will also closely monitor price changes, strengthen market regulation and crack down on violations like spreading false information and price gouging in the market.

Zhu Yi, a senior analyst with metals and mining at Bloomberg Intelligence, a market monitor, said the announcement will help stabilize the industrial chain and maintain market stability.

The announcements made by the commission have demonstrated the government's determination to stabilize the iron ore market, which is expected to help maintain market order and prevent enterprises from misbehaving.

"Iron ore prices could be pressured this year on lower output of China's crude steel and rising supply of overseas mines," said Zhu.

"China's domestic iron ore output could rise 4 percent this year, as the government boosts domestic production to reduce reliance on imports."

The proportion of steel produced by electric arc furnaces, which use scrap steel as raw material rather than the iron ore consumed by blast furnaces, could rise to between 15 percent and 20 percent in 2025, compared with 9.2 percent in 2020, she said.

According to Zhu, rising iron ore prices are in line with the rally in other mineral resources amid the global economic recovery seen since last year.

Improving global demand and supply disruptions caused by energy shortages have driven up prices of mineral resources. China's power curtailment and winter heating season production limits have further tightened the supply of metals like aluminum and steel, she said.

The iron ore price rally has caught the attention of the market watchdogs recently. The commission and the China Securities Regulatory Commission have earlier held talks with iron ore-related companies, asking them not to corner and hoard iron ore goods or force commodity prices up.

The NDRC said in late January that iron ore prices surged due to market speculation, as domestic inventories have remained at high levels for years.