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China coking coal futures gain on prospects of fresh import curbs

Source: Pixabay, November 6, 2019
Coking coal futures in China rose on Tuesday amid market talks about fresh import curbs on the steelmaking raw material in some provinces, following brisk purchases in recent months by the world’s biggest coal buyer and consumer.

Dalian Commodity Exchange’s most-traded coking coal contract , with January 2020 expiry, jumped 2.1% to 1,247 yuan ($177.50) a tonne, after touching its lowest in more than two weeks on Monday.

Coke, which is produced from coking coal, rose 2.0% to 1,768 yuan a tonne.

With China’s coking coal imports in the first nine months of the year reaching more 60 million tonnes, total purchases this year could exceed 80 million tonnes, said Richard Lu, senior analyst at commodities intelligence firm CRU.

“That’s too high, compared with last year’s imports of around 65 million tonnes,” he said. “It, thus, makes sense for the government to make its import policy stricter.”

China’s overall coal imports, including thermal coal, during January-September reached 250.57 million tonnes, surging 9.5% from the same period last year.

The country is on track to boost imports of the fuel by more than 10% this year, say traders and analysts, countering expectations that Beijing would cap shipments at the same level as in 2018.

Lu said he had not yet heard of, or seen, any official confirmation of the supposed import curbs, so it remained unclear how the policy was to be implemented.

China previously curbed coal imports to support domestic miners by tightening customs clearances.

“Asian coal markets found some support amid further import controls in China,” analysts at ANZ Research said in a note. “Rumours swirled that several provinces had suspended import declarations for coal.”

Coking coal prices in China hit a 14-month low on Nov. 1, steadily declining since late June amid weak sales, according to Mysteel consultancy.

News Source: REUTERS