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 CMNI3 climbed for the first time since trade resumed last week and gained 15% on Wednesday. Shanghai nickel futures SNIcv1 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 SHSScv1, 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 SRBcv1, for May delivery, inching 0.4% higher to 4,945 yuan a tonne. Hot rolled coils SHHCcv1 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 DCIOcv1 rose 1.3% to 818 yuan a tonne. Spot prices of 62% iron ore were unchanged at $147 per tonne on Wednesday, data from SteelHome consultancy showed. SH-CCN-IRNOR62

Coking coal futures DJMcv1 increased 2.7% to 2,998 yuan a tonne and coke prices DCJcv1 added 3.1% to 3,618 yuan per tonne.

Source: Reuters