China coking coal futures prices jump over 14%

November 3, 2021: Chinese coking coal futures rose for the first time in six trading sessions on Wednesday, surging more than 14% on big backwardation amid tight supplies, while coke prices also jumped.

"Steel production costs are very high now. Mills and coking plants are gaming how much room is there left for further adjustment between spot and futures prices," said Wang Yingwu, an analyst with Huatai Futures in Beijing, adding that profits at coking plants are also thin now.

Current coke prices are around 1,100 yuan ($171.90) per tonne higher than the January futures contract, while spot coking coal prices are also several hundred yuan higher, according to a Huatai Futures note.

The most actively traded coking coal futures on the Dalian Commodity Exchange soared as much as 14.1% to 2,507 yuan ($391.80) per tonne, the biggest percentage change since Nov.22, 2016. They ended up 12.7% at 2,477 yuan a tonne.

Coke futures on the Dalian bourse powered 8% to 3,215 yuan per tonne at close, after gaining as much as 9.5% earlier during the session.

Benchmark iron ore futures on the Dalian exchange dipped 0.4% to 590 yuan a tonne. Spot 62% iron ore for delivery to China declined $5 to $102 per tonne on Tuesday, data from SteelHome consultancy showed.

Steel prices on the Shanghai Futures Exchange were mixed.

Construction rebar inched 0.1% lower to 4,385 yuan a tonne while hot-rolled coils used in the manufacturing sector rose 1.6% to 4,782 yuan per tonne.

Shanghai stainless steel futures, for December delivery, faltered 0.9% to 18,565 yuan a tonne.

($1 = 6.3986 Chinese yuan renminbi)

Reuters