Chinese coking coal, coke futures extend gains on restocking
Chinese coking coal and coke futures rose for the fifth straight session on Wednesday as traders said steel mills were stocking up on raw materials ahead of a hoped-for resumption of full production after the upcoming Lunar New Year holiday.
Coke continued to outperform, hitting its strongest level in more than seven weeks.
The most-traded coke contract for May delivery on the Dalian Commodity Exchange rose as far as 2,167.50 yuan ($346) a tonne, the most since Dec. 18, before closing 1.8 percent higher at 2,155.50 yuan.
Coking coal rose 0.5 percent to 1,368 yuan per tonne.
“Coking coal and coke are (being) boosted by restocking amid expectation that steel mills would resume production after the holiday,” SDIC Essence Futures said in a research note on Wednesday.
Steel mills had slowed production ahead of the week-long holiday, set to start Feb. 15, as demand remained subdued with the construction industry hampered by icy weather.
Mills in 28 cities have also curbed output since mid-November amid Beijing’s drive to tackle smog during the winter heating season.
The anti-pollution drive has also restricted China’s coal output.
“The slowdown at domestic coal mines has driven up imported coal prices, supporting futures,” said a coal trader in Taiyuan in Shanxi province.
The most-active rebar on the Shanghai Futures Exchange slipped 0.6 percent to 3,937 yuan a tonne.
Iron ore on the Dalian Commodity Exchange climbed nearly 1 percent to 526.50 yuan a tonne.
Iron ore for delivery to China’s Qingdao port rose 0.3 percent to $75.92 a tonne on Tuesday, the highest since Jan. 22, according to Metal Bulletin.
China’s iron ore imports recovered in January to one of the highest levels on record, Thomson Reuters ship-tracking data showed, as steel producers replenished inventories ahead of the holiday and the end of steel output curbs next month.
Seaborne shipments of the steelmaking commodity rose to 93.7 million tonnes last month, according to data compiled by Thomson Reuters Supply Chain and Commodity Forecasts. Shipments in February have already surpassed 70 million tonnes, the data showed.
Source: Reuters (Reporting by Ruby Lian and Manolo Serapio Jr.; Editing by Kenneth Maxwell and Subhranshu Sahu)