Iron ore prices fell on Tuesday after a state-backed bourse in China said it would limit trading volumes of futures contracts for the key steelmaking ingredient.

According to Fastmarkets, benchmark 62% Fe fines imported into Northern China fell 0.69%, to $126.01 per ton.

The most-traded January iron ore contract on China’s Dalian Commodity Exchange (DCE) ended daytime trading 0.48% lower at 923.5 yuan ($126.81) a metric ton.

The DCE said late on Monday that trading volumes of opening both long and short positions on iron ore futures from January to May 2024 among any non-futures company member shall not exceed 1,000 lots on any single day, effective Wednesday.

Trading volume on the other futures contracts shall not exceed 2,000 lots for a single day, it added, while trading volume for hedging and market-making of opening positions shall be exempted.

The DCE also announced it will raise trading fee rates of iron ore futures contracts from January to May 2024 from daytime trading on Thursday.

“The move is to curb the excessive speculative activities and we expect iron ore prices to move within a limited range in the short term,” said Cheng Peng, a Beijing-based analyst at Sinosteel Futures.

Also weighing on sentiment was news of unseasonably cold weather and blizzards hitting northeast China on Monday, raising concerns that more regions will be hit by the cold wave, affecting construction activities.