MANILA: Iron ore futures were subdued on Wednesday following an extended rally spurred by optimism around China demand prospects, after the Dalian Commodity Exchange (DCE) adjusted trading limits for certain contracts.

The adjustments, which came into force from Tuesday’s night session, followed a fresh DCE reminder on Friday about managing market risks and the need to strengthen daily market surveillance and ensure market stability.

The DCE had previously made similar adjustments to trading limits amid speculative trading pushing iron ore prices higher.

Last month, China’s state planner repeatedly warned against excessive price speculation in iron ore, and vowed to increase supervision of the country’s spot and futures markets.

On Tuesday, iron ore futures surged past $130 a tonne, breaking away from the $120-$130 trading range it had been confined to for weeks, after the world’s largest listed miner, BHP Group, flagged a brightening demand outlook in top steel producer China.

Iron ore was also supported on the supply side, with South Africa’s Kumba Iron Ore Ltd cutting its production outlook for the next three years due to a lack of freight trains to carry minerals to ports. The most-traded May iron ore on the DCE was up 0.3% at 916 yuan ($132.82) a tonne, as of 0231 GMT.

On the Singapore Exchange, benchmark March iron ore slipped 0.4% to $130.60 a tonne. “The key factor affecting the ore price is the government’s regulatory policy on the iron ore market, which needs to be given sufficient attention,” Huatai Futures analysts said in a note. Steel benchmarks and other Dalian steelmaking inputs, however, edged higher.

Rebar on the Shanghai Futures Exchange rose 0.7%, hot-rolled coil climbed 0.5%, wire rod gained 1.1%, and stainless steel advanced 1.4%. Coking coal and coke rose 1.3% and 1.1%, respectively.