Coke and coking coal futures in China rose in early trade on Wednesday as worries over supply of the steelmaking ingredients intensified due to the coronavirus epidemic that has restricted business activity and movement of people in the country.
The most-traded coke contract on the Dalian Commodity Exchange rose 1.2% to 1,788.50 yuan a tonne, adding to Tuesday’s 0.3% gain.
The most-active Dalian coking coal contract was up 1.7% at 1,209 yuan a tonne, after advancing 0.6% on Tuesday.
“Due to the shortage of raw material supply, coke companies have stopped production in a wide range,” analysts at SinoSteel Futures Co Ltd wrote in a note.
Coke stocks at steel mills and ports have fallen, pushing spot prices higher, they said.
Spot prices of coking coal, the main raw material to produce coke, have also risen as some coal mines in China struggle to restart operations after the holiday, with many workers affected by travel curbs and other restrictions imposed to contain the epidemic.
On Saturday, China National Energy Administration urged coal miners to resume production to keep the market supplied and stabilise prices amid the coronavirus outbreak.