Chinese coking coal futures climbed by more than 4 percent on Friday to their highest in over a month amid supply concerns due to production inspections, while steel prices were also fuelled by sentiment on output controls and resilient demand, Reuters reports.
“With the coming 100th anniversary of the Communist Party’s founding, major producing areas have stepped up safety inspections… there are increasing production reduction or suspension,” analysts with Haitong Futures wrote in a note.
The most-traded coking coal futures on the Dalian Commodity Exchange, for September delivery, gained by 4.3 percent to 2,068 yuan (US$320.81) per ton, the highest since May 13.
They were up by 2.0 percent to 2,022 yuan a ton by 0301 GMT.
Other steelmaking ingredients also increased.
Benchmark iron ore futures climbed by 2.1 percent at 1,231 yuan a tonne, tracking spot 62 percent iron ore which gained by US$5 to US$221 per ton on Thursday.
Coke futures on the Dalian bourse increased by 1.6 percent to 2,759 yuan a ton.
Steel prices on the Shanghai Futures Exchange also increased, although data from Mysteel consultancy showed that apparent demand for steel products fell 4.8 percent as of June 17 from the week earlier.
“Despite historical tendencies for steel prices to cool in June when construction activity usually slows in China, prices have continued to rise due to investor speculation of a supply crunch on the back of government efforts to lower steel production,” Fitch Solutions wrote in a note, adding that they are not expecting output to slow down this year.
Construction steel rebar, for October delivery, jumped by 2.2 percent at 5,163 yuan a ton. Hot rolled coils were up by 2.8 percent at 5,458 yuan per ton.
Shanghai stainless steel, for July delivery, increased by 1.2 percent at 16,280 yuan a ton.