Global metals markets — both base and precious — have seen powerful rallies and a surge in trading activity since the start of the year, with many materials hitting all-time peaks. That jump had already prompted other measures by commodities exchanges to tackle market risks.
Tin saw a major spike last week — gaining more than 18% on the London Metal Exchange — and hit a fresh record earlier on Monday (Jan 26). The metal, used in packaging and electronics, is a relatively small market in London, compared with materials such as copper and aluminium. It can be prone to major swings.
“Metals have been rising too rapidly,” said Gao Yin at Shuohe Asset Management Co. “With authorities issuing measures against trading, sentiment will be cooling a bit.”
SHFE’s announcement of trading restrictions didn’t give any details about which companies were affected, exactly what was being investigated nor the precise scope of the restrictions. It said the clients were suspected of “failing to disclose actual control relationships”, according to the statement.
See also: Indonesian nickel plants halt output after deadly landslide
In Shanghai, tin ended 1% lower at 425,340 yuan a tonne, after earlier gaining as much as 7.7% to a record. On the LME, futures were 5.6% lower at US$53,625 a tonne at 7.26am local time, after gaining 1.2% to an all-time high. At the close of last week, the LME price had been up about 40% year-to-date.
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