China’s coke futures snap 4-day losing streak as Tangshan extends cuts
China’s coke futures prices broke a four-day losing streak on Wednesday after China’s top steelmaking city, Tangshan, extended production cuts across heavy industry as part of its efforts to improve its toxic air.
The most-active Dalian futures settled at 2,393 yuan per tonne, up 1.3 percent from the previous day’s settlement. Earlier in the session, prices had jumped as much as 3 percent.
Tangshan will implement cuts across steel, coke and power sectors this month, the latest step to cut smog ahead of the winter. The city based in Hebei had introduced the measures on July 20 to Aug. 31.
Coking coal closed 0.85 percent higher at 2,393 yuan amid concerns about falling supplies after output cuts in Shanxi province, stirring expectations of greater imports.
“The shutdown of some coal processing plants in Lvliang city of Shanxi to meet environmental protection standards worsened the supply of product coking coal (especially premium coking coal),” said Argonaut Research analysts in a note.
Output in the first seven months of the year was down 3.5 percent.
Steel prices moved off lows of the day on the Tangshan news, but notched up its ninth day of losses out of the past 11 sessions as worries linger about slowing demand in the world’s top producer.
The most-active construction steel rebar futures contract on the Shanghai Futures Exchange, for January, settled 0.5 percent lower at 4,087 yuan ($597.5) per tonne. Earlier in the day, they had fallen as much as 1.41 percent.
The moves dampened expectations that the mills would crank back into gear after the summer cuts.
“Recently, the intensity of the … production restrictions on steel mills has weakened,” said Zhao Xiaobo, an analyst at Sinosteel Futures in Beijing.
“The steel mills that limited their production previously, such as in the Tangshan area, have restored the production and steel output will rise in the short-term,” he added.
Dalian iron ore settled up 0.52 percent at 487 yuan a tonne. Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB climbed by 0.9 percent on Tuesday to $66.62 a tonne, according to Metal Bulletin.
Source: Reuters (Reporting by Tom Daly and Josephine Mason Editing by Joseph Radford, Amrutha Gayathri)