Dalian coking coal, coke prolong the rally; iron ore up more than 6%
Band Enrico Dela Cruz
August 24 (Reuters) – Coking coal and Dalian coke futures hit record highs on Tuesday, prolonging a meteoric rally fueled by concerns over the supply of steel ingredients from China’s top steel producer.
The most traded coking coal contract on the Chinese Dalian Commodity Exchange DJMcv1 ended the day up 5.8% to 2,465 yuan ($ 380.50) per ton, after hitting an all-time high of 2,571 yuan.
Coke DCJcv1 rose 6.5% to 3,150.50 yuan per ton, after hitting a high of 3,267.50 yuan.
The prospect of a prolonged squeeze in supplies of metallurgical or coking coal in China has supported prices, pushing up the cost of coke – the processed form of coking coal.
“Some coke companies have already suffered losses and have actively restricted production,” Sinosteel Futures analysts said in a note.
Coke is used as a reducing agent in smelting iron ore, the key ingredient in steel making.
Benchmark iron ore futures rebounded as Dalian prices prolonged gains overnight as allaying concerns about the COVID-19 outbreak in China helped calm nerves after several days of massive sales driven by demand concerns.
The most traded Dalian iron ore for delivery in January 2022 jumped 6.2% to 817.50 yuan per tonne, rebounding from a 7.5-month low on Friday.
The most active September iron ore contract on the Singapore stock exchange SZZFU1 was up 8.2% to $ 146.90 per tonne, at 0714 GMT.
Iron ore spot for delivery to China SH-CCN-IRNOR62 stabilized at $ 140.50 on Monday, the lowest since December, according to advice from SteelHome.
Structural steel rebar on the Shanghai Futures Exchange SRBcv1 climbed 2.4%, while the hot rolled coil SHHCcv1 gained 2.5%. Stainless steel SHSScv1 added 0.4%.
Spot rebar prices have rebounded from recent declines, with market sentiment showing signs of stabilizing now that the peak consumer season is fast approaching, consulting firm Mysteel reported.
Heavily oversold iron ore futures recover https://tmsnrt.rs/3kmpyX9
(Reporting by Enrico Dela Cruz in Manila; Editing by Subhranshu Sahu and Rashmi Aich)
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