BEIJING (Reuters) -Chinese coking coal and coke futures surged on Tuesday, fuelled by concerns of tight supply amid Beijing’s toughening emissions standards, although demand for the steelmaking ingredients remained tepid as mills cut production.
“Under the energy consumption restriction and environmental policy, the supply and demand for coke contracted,” Huatai Futures analysts wrote in a note.
Coking coal imports from Mongolia are still sluggish while the shortage in thermal coal also indirectly affected coking coal blending supply, Huatai Futures added.
Prices for the metallurgical coal on the Dalian Commodity Exchange surged as much as 5.4% to 3,000 yuan ($463.95) per tonne. The contract closed up 5.1% at 2,992 yuan a tonne.
Thermal coal futures on the Zhengzhou Commodity Exchange hit their 8% trading limit during the session and ended up 7% to 1,329 yuan per tonne.
Dalian coke futures soared 6.5% to 3,410 yuan a tonne.
Tight coal supply, which led to power cuts across households to industrial sectors in China, fuelled steel prices. Widening power shortages have halted production at numerous factories including many supplying Apple and Tesla, while some shops in the northeast operated by candlelight and malls shut early as the economic toll of the squeeze mounted.
Construction steel rebar on the Shanghai Futures Exchange rose 2.4% to 5,634 yuan per tonne.
Hot-rolled coils, used in cars and home appliances, increased 2.1% to 5,671 yuan a tonne.
Shanghai stainless steel fell 1.0% to 20,520 yuan a tonne.
Benchmark iron ore futures on Dalian bourse, retreated after gaining for three consecutive sessions and dropped 2.9% to 678 yuan per tonne.
($1 = 6.4662 Chinese yuan renminbi)
Reporting by Min Zhang and Dominique Patton; Editing by Sherry Jacob-Phillips and Rashmi Aich
Source: Reuters