China coke futures rally to their highest in five weeks
Chinese coke futures prices rallied more than 4 percent to their highest in five weeks on Monday, as a source said a group of small producers is considering slashing output to revive prices.
The most-active coke futures for delivery in September on the Dalian Commodity Exchange rose to as much as 1,940 yuan ($308.43) a ton, the highest since March 16.
The gains demonstrate that the potential cut from coke producers has offset concerns of falling demand for coke and other industrial commodities. Cities in China’s polluted northern regions are starting to limit operations at some heavy manufacturing plants following the launch of fresh environmental inspections.
The city of Handan in North China’s Hebei Province, one of the most polluted cities in the north, the Shandong Coke Association and the China Coke Association held a meeting on Wednesday of about 40 small coke producers based in Hebei and East China’s Shandong Province, according to a source briefed on the gathering. The source declined to be named due to the sensitivity of the matter.
At the meeting, the factories considered reducing output by at least 15 percent but did not reach a final agreement, the source said.
The extension of the curtailments on heavy industry that were enacted during the winter has also supported prices since they also apply to coke manufacturers. Coke is a fuel that is rich in carbon and is used to smelt steel and make cement.
Coke supplies are falling. Inventories at Lianyungang port in East China’s Jiangsu Province have dropped by 40 percent since the beginning of April to 93,500 tons as of Monday, data from Steel Home showed.
However, market participants said the rebound in coke could be shortlived.