A brace of rubber contracts have also been suspended following successive daily falls and several other rubber expiries were approaching that position at the start of trading on October 9.

Zinc futures had stabilised somewhat and may avoid suspension.

SHFE, like all Chinese exchanges, was closed for the whole week ending Friday October 3 for the country’s National Day holiday. During that period the price of copper tumbled internationally and the Shanghai market has been catching up since reopening at the start of this week.

According to exchange rules, copper contracts are allowed to drop 4% in a single day, 5% the next and 6% on the third, after which, as an SHFE announcement confirmed on October 9, “these contracts will be suspended [from] trading for one day on the next trading day”.

“The week-long holiday was unfortunately timed and it was inevitable there was going to be a precipitous decline on reopening,” said one Asian hedge fund manager. “The problem is the SHFE copper price is still way above international marks, so there could well be more limit down days after the suspension.”

The exchange’s busiest copper contract, the December 2008 delivery, closed on Wednesday October 8 at Rmb45,720 ($6,711) a tonne.

Wednesday’s closing price for the equivalent contract was $5,435 a tonne on the London Metal Exchange and the equivalent of $5,094 a tonne on the New York Mercantile Exchange.

At the same time as the copper announcement, SHFE suspended for one day its March and May 2009 delivery rubber futures, following three limit down days.

April 2009 delivery has reached its second price down limit and July 2009 its first. Both those contracts were trading within limits early on October 9.

Zinc contracts at SHFE, which had gone limit down on back-to-back days, did not reach the third limit on October 8 and opened for trading the next day with the lower 4% limit in place. In early trading the zinc price had fallen but was inside the acceptable range.