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Chinese coking coal futures extended gains on Monday to a fourth session, surging more than 5%, as supply remained relatively low and demand was expected to recover following the Lunar New Year holidays and the Winter Olympics.
Inventories of the metallurgical coal at 247 steel mills and 230 coking plants covered by Mysteel consultancy stood at 21 million tonnes last week, down 4% from a week earlier.
“With demand at downstream users recovering, coking plants are more willing to buy products,” analysts with GF Futures wrote in a note.
Resumption of production at blast furnaces and the use-up of Australian coal could keep supply tight in China, they said.
The most-active coking coal futures on the Dalian Commodity Exchange DJMcv1, for May delivery, ended up 5% to 2,647 yuan ($418.07) per tonne, the highest closing price since Oct. 27.
Coke prices on the Dalian bourse DCJcv1 jumped 3.6% to 3,389 yuan a tonne at close. They gained up to 3.8% earlier in the session.
Benchmark iron ore futures DCIOcv1 rose for the first time in six sessions after regulators’ price-containing measures last week. They were traded range-bound in morning session and soared 4.7% to 707 yuan a tonne when market close.
“As the Winter Olympics had finished, (steel) production curbs will continue to improve… (but) policies will still pressure iron ore prices in the short term,” said GF Futures.
Stocks of the steelmaking ingredients at Chinese ports stood at 160.95 million tonnes last week, data from SteelHome consultancy showed, rising 2.9% from a week earlier.
Spot prices of iron ore with 62% iron content for delivery to China dipped $0.5 to $134 a tonne on Friday.
Steel rebar on the Shanghai Futures Exchange SRBcv1 rose 2.4% to 4,845 yuan a tonne. Hot-rolled coils SHHCcv1, used in the manufacturing sector, gained 2% to 4,959 yuan per tonne.
Shanghai stainless steel futures SHSScv1, for April delivery, edged up 0.4% to 18,760 yuan a tonne.
Source: Reuters