BEIJING: Chinese stainless steel futures soared as much as 10% on Thursday to their highest since March 9, after raw material nickel’s prices hit upper limits on both the London Metal Exchange (LME) and the Shanghai bourse.

Benchmark nickel on the LME climbed for the first time since trade resumed last week and gained 15% on Wednesday. Shanghai nickel futures opened up 17% to hit the trading upper limit on Thursday.

“Stainless steel futures are again led by LME nickel prices and detached from the fundamentals in the short term,” Huatai Futures wrote in a note, adding that consumption of the metal was still held back by the COVID-19 situation.

The most-active stainless steel contract on the Shanghai

Futures Exchange, for April delivery, closed up 6.7% at 21,680 yuan ($3,405.00) a tonne. It rose to 22,345 yuan per tonne earlier during the session.

Other steel products on the Shanghai exchange were steady, with construction-used rebar, for May delivery, inching 0.4% higher to 4,945 yuan a tonne. Hot rolled coils rose 0.5% to close at 5,173 yuan per tonne.

Top steelmaking city Tangshan, also a major production hub for hot rolled steel products, is still under lockdown as local government struggles to contain infections after reporting dozens of locally transmitted COVID-19 cases.

Benchmark iron ore futures on the Dalian Commodity Exchange rose 1.3% to 818 yuan a tonne. Spot prices of 62% ironore were unchanged at $147 per tonne on Wednesday, data from SteelHome consultancy showed. Coking coal futures increased 2.7% to 2,998 yuan a tonne and coke prices added 3.1% to 3,618 yuan per tonne.