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China's coking coal hits 13 month high on firmer demand, tighter supply

Coal News - Published on Thu, 18 Oct 2018

Image Source: Club of Mozambique
Reuters reported that Chinese coking coal futures climbed to their highest in more than a year as Beijing’s flexible approach to industrial production curbs fueled demand with supply restrictions also supporting the steelmaking raw material. China has ditched a blanket curtailment of production by industrial plants this winter, including steel mills, instead allowing provinces to set their own output restrictions based on emission levels. It’s the second straight winter that China is implementing the curbs as part of its battle against pollution.

Mr Richard Lu, analyst at CRU consultancy in Beijing, said that “This means that overall demand for steelmaking raw materials will be more than expected even though there will be some constraints. So that’s providing some upside for prices.”

Mr Lu that the most-traded January coking coal contract on the Dalian Commodity Exchange jumped as much as 2.7 percent to CNY 1,402 a tonne, the highest since September 2017. It was up 1.8 percent at CNY 1,389 by 0253 GMT. Coking coal supply in China is also tighter as winter approaches with the transport of thermal coal - needed to fuel power plants - being given priority over coking coal.

He said that “We have also seen supply restrictions from Australia and Mozambique. The supply of metallurgical coal in the global seaborne market is quite tight at the moment.”

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Posted By : Rabi Wangkhem on Thu, 18 Oct 2018
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