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China's Dalian coke rises 4pct as coal hub to cut output

Coal News - Published on Thu, 11 Oct 2018

Image Source: ET EnergyWorld
Reuters reported that China’s Dalian coke futures jumped more than 4 percent as investors worried about tighter supplies after the major coal mining province of Shanxi vowed to reduce annual coke output. The northwestern province on Tuesday pledged to cut coking capacity and coke production, as part of its long-term campaign against air pollution. Coke producers in Shanxi will be given until October 1st 2019 to meet stringent environmental standards or be shut down, according to a government statement. They will also be encouraged to phase out small and outdated production equipment, the statement said.

Analysts from CITIC Futures said in a note in Mandarin “Buoyed by Shanxi’s plan on the coke industry and expectation of tight supply amid coming winter production restrictions, we expect prices in the futures market to rise in the short-term.”

In the spot market, some coke producers in northern China hiked selling prices by CNY 50 to CNY 100 a tonne as environmental checks intensified. The most-active coke contract for January delivery on the Dalian Commodity Exchange jumped as much as 5.4 percent before market closed at 0700GMT, touching a high last seen since on Aug. 30. The contract settled 4.2 percent up at 2,458.5 yuan a tonne.

Dalian coking coal futures recovered from earlier losses and rose 2.1 percent to CNY 1,363.5 a tonne, after reaching a peak of CNY 1,394, its highest level since Dec.4,2017.

However, analysts cautioned that steel mills would limit their restocking of raw materials as the winter heating season approaches, when steel mills will face production curbs, which may bring downward pressure on demand and prices.

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Posted By : Rabi Wangkhem on Thu, 11 Oct 2018
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