IRON ore and steel futures in China fell again yesterday as authorities raised trading costs to deter speculative investors believed to be behind last week’s big spike in prices and volumes, which had raised fears of a destabilizing crash.

    Commodities exchanges in Dalian, Shanghai and Zhengzhou announced further measures late Tuesday, including higher fees and a reduction in night hours, adding to a raft of moves this month that have made it more expensive for investors to trade.

    Goldman Sachs Group Inc. said this week it was concerned about the surge in speculative trading in iron ore, adding daily volumes were so large that they sometimes exceed annual imports.

    Ore prices have surged 34 percent this year in Dalian, while steel reinforcement bar is up 39 percent in Shanghai. Morgan Stanley said the spike in speculative trading had stunned global markets, citing a jump in activity for eggs, garlic and cotton as well as iron ore and steel.

    The explosive growth in trading has stoked concerns that the frenzy was triggered by a credit-fueled surge in liquidity echoing the stock market bubble in 2015 and is destined for a similar bust, according to Zheng Ge, analyst at CEFC Wanda Futures Co.

    Analysts say speculators were betting that a rise in infrastructure spending in China would lift raw material prices, which have been depressed for years by a persistent supply glut.

    Among the latest changes, the Dalian exchange raised trading fees for iron ore, coking coal and coke, while Shanghai said it would increase margin requirements for steel reinforcement bar and hot-rolled coil, and shorten trading hours. The Zhengzhou exchange raised trading charges and margin requirements for some commodities.

    The curbs implemented by the exchanges seemed to be having the desired effect, said Wang Di, analyst at CRU consultancy in Beijing.

    Iron ore futures plunged 4.1 percent yesterday, extending their decline in the past four days to 8.9 percent. Steel reinforcement bar lost 3.2 percent and coking coal slid 4.6 percent as prices responded to the exchange moves. (SD-Agencies)