keywords :
Chinese metallurgical or coking coal futures soared to a two-week high as supply concerns resurfaced, pushing prices of steelmaking ingredient coke higher.
The most-traded January coking coal DJMcv1 on China’s Dalian Commodity Exchange rose as much as 7.7% to 3,044 yuan ($470.62) a tonne, its strongest since Sept. 10. It was up 6.2% at 3,002 yuan, as of 0700 GMT.
Coke DCJcv1 advanced 4.1% to 3,482 yuan a tonne.
Coking coal and its processed form – coke – are this year’s top gainers in China’s ferrous metal complex.
Dalian coking coal has risen more than 80% this year as top steel producer China struggles with tight supply following a ban on Australian coal, disruptions in Mongolian shipments and weak domestic output due to mine safety restrictions.
“The coking industry in Shandong, Shanxi and parts of Hebei is affected by factors such as environmental protection and production restrictions,” Sinosteel Futures analysts said in a note, referring to China’s top steel-producing provinces.
Chinese iron ore futures extended gains as sentiment picked up following some positive news about cash-strapped China Evergrande Group 3333.HK.
Dalian’s January iron ore DCIOcv1 closed 3.9% higher at 667 yuan a tonne, after earlier hitting 685.50 yuan, its loftiest since Sept. 16. The Singapore Exchange’s October contract dropped 1.3% to $106.35 a tonne, off the day’s high of $111.95.
Rebar SRBcv1 rose 1.3% on the Shanghai Futures Exchange, while hot-rolled coil SHHCcv1 slipped 0.8%. Stainless steel SHSScv1 gained 1%.
“The rise in steel rebar futures highlights that China’s steel production cuts are having an outsized impact on China’s steel market,” Commonwealth Bank of Australia analyst Vivek Dhar said. “These cuts remain the key risk to further drops in iron ore prices.”
Spot iron ore in China traded at $105 a tonne on Wednesday, near a 14-month low and down 55% from a record peak in mid-May, SteelHome consultancy data showed.