China coke futures rise as producers raise prices
16 November 2017
Chinese coke futures rose on Thursday as mills in the world’s top steel producer increased prices to offset the cost of higher raw materials, but steel prices eased.
Coke producers in some regions including the top coal producing region of Shanxi province have raised coke prices by 100 yuan ($15) a tonne to 1,600 yuan a tonne, analysts said.
Producers of the steelmaking ingredient had been incurring losses of up to 100 yuan a tonne due to high coal prices even as coke demand from steel mills has eased amid high inventories.
“Coke producers have a strong desire to raise prices as prices have fallen too much, while steel mills are still enjoying a bumper profit of up to 1,500 yuan a tonne,” said Yu Yang, analyst with Shenyin & Wanguo Futures in Shanghai.
The most-active coke for January delivery on the Dalian Commodity Exchange closed 0.4 percent higher at 1,811.50 yuan a tonne.
China has ordered production curbs at industrial plants, including coke producers, steel mills and construction sites, in 28 cities, to battle smog, hitting both supply and demand for steel.
“Steel mills are reluctant to accept the price hike for now, but they will restock eventually,” said a research manager with a trading firm in Hangzhou.
The most-traded iron ore contract on the Dalian Commodity Exchange rose 1.2 percent to 458 yuan a tonne.
Rebar on the Shanghai Futures Exchange slipped 1.6 percent to 3,680 yuan a tonne and Dalian coking coal dropped 2.2 percent to 1,168.50 yuan.
Iron ore for delivery to China’s Qingdao port .IO62-CNO=MB fell 2.1 percent to $61.84 a tonne, the lowest since Nov. 3, according to Metal Bulletin.