Hedging transactions are not affected by the limits.

The exchange will also raise intraday transaction fees from Aug. 15 on those same contracts to 0.05 percent of the total value, from 0.01 percent previously.

"Certainly this will help cool down the very hot futures market with futures prices rallying for either fundamental or speculative reasons," said Helen Lau, an analyst at Argonaut Securities in Hong Kong.

But she cautioned that the impact may not last.

"Going forward, if there's still money-making opportunity in trading futures for speculators or for institutions, the market will be back to life again," Lau said.

Sources told Reuters earlier on Friday that the exchange had informed members it may raise margins on steel rebar futures contracts if turnover remains too high.

Shanghai's most-active rebar contract closed down 2.7 percent at 3,862 yuan a tonne ($579.40) on Friday. It had hit 4,016 yuan a day earlier, its highest since March 2013.

Friday's trading volume was over 9.15 million lots, the most for a single day since May 25.

The Shanghai exchange is not the only entity to urge calm in Chinese markets over the past week.

The China Iron and Steel Association said on Thursday it believed the spike in steel futures prices was due to speculation rather than fundamentals, after meeting with its members in Beijing.

Chinese exchanges, including Dalian, Shanghai and Zhengzhou, imposed a series of similar curbs in 2016 to stamp out speculative trading that bloated prices and trading volumes across commodities from steel to rubber.

($1 = 6.6655 Chinese yuan) (Reporting by Tom Daly in BEIJING; Additional reporting by Manolo Serapio Jr. in MANILA; Editing by Tom Hogue)