Global Markets: Chinese coal and coke futures extend gains on restocking
SHANGHAI, Feb 7 (Reuters) – 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 futures on the Dalian Commodity Exchange rose as high as 2,163 yuan a tonne, the most since Dec. 19, and were up 1.4 percent at 2,146 yuan by 0234 GMT. Coking coal rose 0.5 percent to 1,368.50 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, Shanxi province.
The most-active rebar on the Shanghai Futures Exchange was off 0.3 percent at 3,947 yuan a tonne.
Iron ore on the Dalian Commodity Exchange gained 0.3 percent to 523.50 yuan a tonne.
Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB rose 0.3 percent to $75.92 a tonne on Tuesday, the highest since Jan. 22, according to Metal Bulletin.
Reporting by Ruby Lian and Josephine Mason Editing by Kenneth Maxwell
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