Rising commodity prices pushed copper and iron down last week. Iron ore futures in Singapore dipped by roughly 11%, while copper, which set a new price record on May 10, slipped by 4.7%.

Most likely, the explosive surge in US inflation alarmed the financial markets, as a very high rate might constrain global economic recovery, not to mention force the Federal Reserve to change its monetary policy much earlier than scheduled.

Bart Melek, an analyst at TD Securities, said: "Many are concerned that high inflation will push the Fed to raise interest rates much earlier than scheduled. The increasing decline in leverage in China may also reduce demand for commodities."

Copper and iron ore were among the biggest gains in the year-on-year rally among commodities. But Colin Hamilton, managing director at BMO Capital Markets, said: "Copper, although will continue to sell at a very good price, may come under pressure."

At the same time, prices went down because the government of Tian Shan pledged to punish violations, including price manipulation. Steel enterprises were told that their licenses would be revoked if they violate the law.

Tian Shan, which accounts for 14% of China's steel production, has found itself at the center of an industry overhaul as authorities promulgated many production restrictions to control emissions.