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Dalian coking coal and coke futures fell about 3% on Thursday, dented by poor spot market prices, while thin profits at mills also hurt downstream demand for the steelmaking ingredients.
The most-traded coking coal futures on the Dalian Commodity Exchange for September delivery fell as much as 3.8% to 2,780 yuan ($421.67) per tonne. They ended down 1.6% at 2,843 yuan a tonne.
Coke prices on the Dalian bourse DCJcv1 slipped 1.4% to 3,561 yuan per tonne, after losing as much as 3% earlier during the session.
Current profits at mills are relatively low, and steel producers are reluctant to take high-cost raw materials, a Huatai Futures note said on Thursday, adding that consumption has still not recovered yet.
“In the short term, the pandemic situation is still a relatively big disruption,” said Huatai Futures. “But supplies are relatively tight, especially for coking coal … it’s hard for coking coal and coke prices to plunge further in the longer run.”
In a statement issued by the finance ministry on Thursday, China said it would exempt tariffs for imported coal from May 1, 2022 to March 31, 2023, in an effort to strengthen energy supplies.
Benchmark Dalian iron ore futures DCIOcv1 jumped 3.5% to 852 yuan a tonne. Spot 62% iron ore for delivery to China, assessed by SteelHome consultancy, was flat at $139.5 a tonne on Wednesday.
Steel products on the Shanghai Futures Exchange traded within a tight range. Construction material rebar SRBcv1 for October delivery dipped 0.3% to 4,850 yuan a tonne.
Hot-rolled coils SHHCcv1, used in cars and home appliances, was unchanged from the previous session at 4,950 yuan per tonne when market closed.
The June contract of Shanghai stainless steel futures SHSScv1 inched up 0.6% to 19,450 yuan a tonne.
China’s Premier Li Keqiang said at a State Council meeting on Wednesday that the country would tackle bottlenecks in supply chains affected by COVID-19 by easing congestion at ports and airports and restoring delivery services.