China’s commodity exchanges move to cool iron ore, steel prices as supply squeeze fuels global rally
- Efforts to temper gains in prices of iron ore, steel futures have so far failed to restrain a rally to new highs
- China is the world’s biggest importer of iron ore and producer of steel, according to official data
The Dalian Commodity Exchange raised the margin requirement and widened the daily trading band for iron ore contracts starting Tuesday, without giving specific numbers, according to a statement posted its website late on Monday.
The Shanghai Futures Exchange also on the same day raised trading costs by reinstating fees for closing positions on contracts linked to steel rebar and hot-rolled coils at 0.01 per cent of transaction value, according to a statement on its website.
“There are lots of uncertain factors affecting market operations and commodity prices, particularly coking coal and iron ore, resulting in wild swings,” the Dalian exchange said. “Market players should participate rationally to guard against risks and ensure smooth functioning of the market.”
The cooling measures, however, have failed to restrain the rally, with prices reaching fresh all-time highs on Tuesday. The most active contracts on iron ore gained 1.7 per cent to 1,306.5 yuan per ton, while those on rebar and hot-rolled coils rose at least 4.6 per cent in Shanghai. Prices of copper, iron ore and steel rebar have surged by 86 to 113 per cent in US dollar terms over the past 12 months, according to Bloomberg data.