China coking coal, coke futures surge to record highs on supply woes

BEIJING : China’s coking coal and coke futures jumped about 9per cent on Monday to record highs, as supply remains tight even though Beijing has ramped up efforts to boost output.

The most-traded coking coal futures on the Dalian Commodity Exchange, for January delivery, surged 8.7per cent to 3,858 yuan (US$599.23) a tonne by 0330 GMT, the highest on record.

Coke futures hit their daily trading limit, up 9per cent at 4,344 yuan per tonne.

“Coke prices were mainly supported by raw material coking coal,” said Tang Binghua, an analyst with Founder CIFCO Futures, adding there was still supply crunch for coking and thermal coal.

“The (tight supply) situation has not eased yet, especially as the government needs to ensure heating demand during winter.”

China’s coal production stood at 334.1 million tonnes in September, compared with 335.24 million tonnes in August and down 0.9per cent on an annual basis, according to data from the National Bureau of Statistics.

Coke output last month plunged 9.6per cent year-on-year to 37.18 million tonnes, data showed.

Other steelmaking ingredients fell. Benchmark iron ore futures on the Dalian exchange dropped 1.2per cent to 719 yuan a tonne.

Spot prices of iron ore with 62per cent iron content for delivery to China gained US$2 to US$123 a tonne on Friday, data from SteelHome consultancy showed.

Steel prices on the Shanghai Futures Exchange gained. Construction-used steel rebar inched up 0.4per cent to 5,490 yuan a tonne.

Hot rolled coils, used in the manufacturing sector, rose 0.8per cent to 5,747 yuan per tonne.

Shanghai stainless steel futures, for November delivery, jumped 1.1per cent to 20,735 yuan a tonne.

(US$1 = 6.4383 Chinese yuan)

(Reporting by Min Zhang and Shivani Singh; Editing by Subhranshu Sahu)

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