Shanghai Futures Exchange copper fell 1.2 percent to close at 37,250 yuan ($5,746) a tonne on Thursday after a commodity exchange in China tightened trading terms for iron ore and coal, dousing their recent rally in a move that also hit sentiment for other metals. The Dalian Commodity Exchange took further steps to calm volatile markets on Wednesday, hiking transaction fees and widening trade limits in a move that could make exiting futures contracts more orderly.
The Dalian exchange's recent series of new rules on trading are aimed at curbing speculation and cutting market risks, the Chinese exchange said in a statement on Thursday. Bulk commodities such as iron ore and coal are usually seen as leading indicators for metals such as copper, a barometer of health for the global economy. A rally in bulks as China boosted credit access earlier this year ignited investor sentiment towards the sector. "This is a correction to test whether or not there are good healthy bids at the lower end," said chief investment officer Jonathan Barratt of Ayers Alliance. "The bulks commodities are leading sentiment into other commodities."