S. Korea to bolster alert system for commodity prices

SEOUL, June 15 (Yonhap) -- South Korea will strengthen its key commodities warning and control system (WACS) to better respond to sudden global supply shortfalls or demand surges that can spike up prices and hurt local industries, the government said Wednesday.
The Ministry of Knowledge Economy said the move comes as prices of raw materials such as iron ore, copper, bituminous coal and crude oil are rising and falling more sharply compared to in the past with changes occurring at shorter, irregular intervals.
"To deal with such developments, government agencies will start sharing information on 16 commodities and set up an around-the-clock WACS that can permit Seoul to respond more quickly to unexpected international developments," it said at the weekly economic policy coordination meeting.
The ministry said it plans to move quickly to release the government's emergency commodities reserves whenever there is a surge in prices, compared to past practices of taking such steps only when there was a steady rise in demand or when a drop in supply was anticipated.
"Taking immediate action can reduce overall fallouts to the economy," it said.
Resource-poor South Korea is almost entirely dependent on imported raw materials to run its factories and generate power. Sudden fluctuations in prices can affect production costs that can hurt international competitiveness for locally made goods and trigger inflationary pressure.
In addition to upgrading the alert system, Seoul plans to permit private companies to stockpile iron scrap.
Sharp price fluctuations of iron scrap have occurred frequently in recent years, which have been cited for disrupting the local market.
yonngong@yna.co.kr