China exchanges move to cool iron ore, steel price rally

BEIJING -China's commodity exchanges on Monday moved to raise trading limits and margin requirements for some iron ore contracts and reinstated fees on steel futures as a blistering rally in the ferrous metals complex showed no signs of abating.

China is the world's top steel producer and biggest consumer of iron ore, the key steelmaking ingredient. A recent spike in prices for the material, partly fuelled by supply concerns, continued with a 10per cent limit-up surge on Monday to a record 1,326 yuan (US$207) a tonne, squeezing mills' profits.

The Dalian Commodity Exchange said it would raise trading limits and margin requirements for iron ore contracts for delivery in June, September, October and December, as well as for January-April 2022 from the May 11 trading day, without providing figures.

The margin requirement is the minimum amount of capital that must be deposited to trade futures.

The Dalian bourse also warned market participants to control risks amid fluctuations in prices of iron ore, coking coal and coke, in a statement on its website.

Separately, the Shanghai Futures Exchange said it would set fees for closing positions on the most active contracts for its steel rebar and hot-rolled steel coil futures, for delivery in October, at 0.01per cent of the total transaction value, starting from the evening session on May 11.

The fees had previously been waived.

Rebar and hot-rolled coil both hit record highs on Monday.

(US$1 = 6.4130 Chinese yuan renminbi)

(Reporting by Min Zhang and Shivani Singh; additional writing by Tom Daly; editing by Louise Heavens and Steve Orlofsky)