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China coke futures hold near 7-week top on upbeat outlook
[SHANGHAI] Chinese coke futures rose for a sixth straight session on Thursday, trading near their strongest in more than seven weeks, over optimism that steel mills will replenish stockpiles of the raw material after the Lunar New Year holiday.
Steel producers and coke plants in 28 Chinese cities were ordered to slash production since mid-November as Beijing fights smog, while production in other regions had slowed ahead of the week-long Chinese New Year that starts next Thursday.
"With physical coke prices having fallen to production cost level and mills' inventories low, we are positive on coke prices after the holiday as mills would replenish stocks to prepare for restarts," said Zhao Chaoyue, a Merchant Futures analyst in Shenzhen.
The most-actively traded coke contract for May delivery on the Dalian Commodity Exchange closed up 0.4 per cent at 2,147 yuan (S$450) a tonne.
It had touched an intraday peak of 2,160 yuan earlier, near Wednesday's high of 2,167.50 yuan, the strongest since Dec 18.
Iron ore on the Dalian Commodity Exchange ended 0.2 per cent higher at 524 yuan per tonne.
China's iron ore imports reached 100 million tonnes in January, the second highest level on record, as steel mills in the top global buyer built inventories before the coming holiday and the lifting of steel output curbs next month.
Iron ore for delivery to China's Qingdao port climbed 1.7 per cent to US$77.20 a tonne on Wednesday, the highest since Jan 12, according to Metal Bulletin.
On Thursday, the most-traded rebar on the Shanghai Futures Exchange slipped 0.4 per cent to 3,930 yuan a tonne.
China said on Wednesday it aims to meet its target for reducing steel production capacity two years earlier than planned, ramping up a years-long push to reduce excess output.
The original plan called for reducing 150 million tonnes of steel production capacity by 2020.
China shut down 115 million tonnes of steel capacity between 2016 and 2017, and closed 140 million tonnes of induction furnaces that use scrap metal to make steel.