Volatility in China commodity futures rattles traders

Boom and bust: On some days trade in iron ore futures, which are up 57 this year on the Dalian Commodity Exchange, exceeded China’s total imports for 2015. – Reuters

SHANGHAI: A surge of volatility in China’s once placid commodities futures markets has rattled industrial players who use them for hedging, with some taking losses or cutting exposure, driven out by a flood of speculative money from hedge funds and retail investors.

A herd of financial investors charged into commodities futures markets this year, throwing money into iron ore, rebar, cotton, and even egg futures, causing rapid spikes and leading many to warn of similarities with last year’s boom and bust in Chinese stocks.