Chinese coking coal and coke futures opened 9 per cent lower on Wednesday (Oct 20) to hit daily trading limits, as the country’s top economic planner pledged to take all necessary measures to bring the coal market back to a reasonable level.
The National Development and Reform Commission said late on Tuesday it would bring coal prices back to a reasonable range and crack down on any irregularities that disturb market order or malicious speculation on thermal coal futures.
Some of China’s major coal producers said they would boost output and cap prices this winter and next spring “regardless of costs” following government’s statements.
Thermal coal futures on the Zhengzhou Commodity Exchange and coking coal and coke on the Dalian Commodity Exchange had plunged in night trading on Tuesday.
The most actively traded coking coal prices, for January delivery, stood at 3,442 yuan (US$538.58) per tonne after touching the down limit. Coke prices fell to 4,039 yuan a tonne.
Prices of coking coal and coke have tumbled 89 per cent and 70 per cent, respectively, since end-June.
The drop in raw material prices also drove declines in steel prices on the Shanghai Futures Exchange. Construction-used rebar fell 2.9 per cent to 5,304 yuan a tonne at close.
Hot rolled coils, used in cars and home appliances, ended 2.5 per cent lower at 5,550 yuan per tonne.
Stainless steel futures, for November delivery, slipped 2.3 per cent to 20,075 yuan per tonne.
Benchmark iron ore futures on the Dalian bourse inched up 0.5 per cent to 710 yuan a tonne.
Spot 62 per cent iron ore prices remained unchanged at US$123 a tonne on Tuesday from the previous session, according to SteelHome consultancy.
Source: Reuters