SHANGHAI stocks rebounded yesterday as investors pursued coal mining and nonferrous metal firms amid surging commodity prices.
The Shanghai Composite Index added 0.68 percent to close at 3,268.43 points.
Shanxi Coking Co jumped 7.47 percent to 9.06 yuan, while Tibet Summit Resources Co gained 7.84 percent to 48.43 yuan.
The key index rose after the most traded coking coal contract for January, 2018 delivery jumped by the daily limit of 8 percent to 1,456 yuan (US$218) per ton, while iron ore futures soared 5.71 percent to 555 yuan per ton and prices for aluminum and copper futures both climbed over 2 percent.
Analysts said the steel and commodity price surges were based on cut in supply, contradicting the view of China Iron and Steel Industry Association that speculators were pushing up steel prices.
“Prices of iron ore, rebar and coal have soared since December 2015 when the government began cutting overcapacity,” said Kang Shuiyue, chief investment officer at Danyang Investment Group.
“No speculation could last this long,” Kang said.