CHINA’S securities regulator said Friday it has urged commodity futures exchanges to strengthen supervision and curb excessive speculation.

    Although trading volumes in the futures markets have obviously fallen in response to recent cooling measures, trading in some products is still over-heated, so “we will continue to guide the exchanges to take appropriate actions against excessive speculation and illegal behaviors,” the China Securities Regulatory Commission (CSRC) said in a statement.

    Commodity exchanges must strengthen market oversight and curb speculative trading, Zhang Xiaojun, a spokesman for the CSRC said at a briefing in Beijing on Friday.

    Financial investors have charged into Chinese commodity futures this year, driving up contracts including iron ore, rebar, cotton and even eggs, leading many to warn of similarities with a boom in the country’s stock markets, which reversed into a sharp crash last summer.

    Last week has seen a marked pullback as China’s three major commodity exchanges raised the cost of trading to avoid mirroring the outcome in stocks.

    The CSRC said Friday that the futures market should stick to its fundamental purpose of serving the real economy and regulators will “adamantly prevent the futures market from becoming a hotbed for short-term speculators.”

    Analysts said speculators have been betting that government plans for more infrastructure spending and signs of a pickup in the economy would fuel more demand for commodities.

    Others suggested commodities futures markets were the only place left for speculators to make quick profits given weakness in stocks, bonds and housing. (SD-Agencies)