Reuters reported that key Shanghai futures contracts for steel reinforcing bars and steel wire rods fell by their 5% daily limit on the Shanghai Futures Exchange on Wednesday as spot prices tumbled.

The November contract for reinforcing bar or rebar fell to CNY 4,219 per tonne as of 0629 GMT compared with its settlement price of CNY 4,442 while steel wire rod for November delivery fell to CNY 4,027.

The rebar futures contract gained nearly a quarter in July, boosted by a surge in prices for structural steel products in China as government economic stimulus measures focusing on infrastructure bolstered demand.

Mr Song Cong analyst at Shanghai CIFCO Futures said "There is a correction on both futures and spot markets. Steel spot prices were pushed up too high previously and we saw trading volumes in the physical market falling quickly as no one could afford it."He said that "The news has been weighing on all the financial markets in China, which have been cautious on any signs of monetary policy tightening."