BEIJING: Chinese stainless steel futures opened 12% lower to hit daily trading limit on Thursday, following Shanghai Futures Exchange halting some nickel trading and fuelled by worries of a back off in the raw material prices.

The Shanghai bourse said it would suspend trading of some nickel contracts for one day on March 9 to tame price volatility after it hit upward trading limit three consecutive days.

“Recent surge in nickel prices was unconventional and derailed from the fundamentals,” said a Shanghai-based analyst, who declined to be named.

“Now that London Metal Exchange and Shanghai Futures Exchange both halted nickel trading, investors would have expectation that price for the ingredient is not going any higher,” the analyst added.

Stainless steel futures for April delivery hit a lower trading limit of 12% to 19,700 yuan ($3,116.84) a tonne since Wednesday night session and stalled on Thursday morning trade.

Analysts with GF Futures also noted that stainless steel will likely track nickel prices to come back within a reasonable range, but the market need to be caution about uncertainties amid Ukraine-Russia crisis.

Construction used steel rebar on the Shanghai exchange dipped 0.4% to 4,926 yuan a tonne as of 0330 GMT. Hot rolled coils, used in cars and home appliances, slipped 0.7% to 5,126 yuan per tonne.

Steelmaking raw materials on the Dalian Commodity Exchange all fell. Benchmark iron ore futures declined 2.5% to 814 yuan a tonne, after faltering as much as 8.8% earlier during the session.

Coking coal prices dropped 1.5% to 3,058 yuan per tonne and coke futures faded 1.3% to 3,724 yuan a tonne.