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China coking coal futures track spot prices higher, jump over 14per cent

China coking coal futures track spot prices higher, jump over 14per cent

FILE PHOTO: An employee monitors molten iron being poured into a container at a steel plant in Hefei, Anhui province September 9, 2013. REUTERS/Stringer

BEIJING/MANILA :Chinese coking coal futures rose for the first time in six trading sessions on Wednesday, surging more than 14per cent 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, analyst with Huatai Futures in Beijing, adding that profits at coking plants are also thin now.

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

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

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

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

Steel prices on the Shanghai Futures Exchange were mixed.

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

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

(US$1 = 6.3986 Chinese yuan renminbi)

(Reporting by Min Zhang and Enrico Dela Cruz; Editing by Rashmi Aich)

Source: Reuters

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