Off The Wire
China coking coal futures soar as import limit report stirs supply fears
Reuters Reuters
Thursday June 29, 2017 12:12 AM
Kitco NewsShare this article:
* Coking coal on track for biggest one-day jump since November
* Coking coal, coke technically overbought on RSI
* Steel, iron ore also higher
BEIJING, June 29 (Reuters) - China's coking coal futures soared 8 percent on Thursday and were on track for their biggest one-day jump in seven months, boosted by a report the world's top consumer plans to ban imports into small ports, stirring worries about tightening supply.
The most-active coking coal futures in early trade touched 1,134.5 yuan ($167.32), up 8 percent and their highest since May 3. Prices were at 1,119.5 yuan a tonne at 0330 GMT.
Coke on the Dalian Commodity Exchange rose more than 5 percent to its strongest in three months, with its intraday peak at 1,773.5 yuan.
"The price rallies on coking coal and coke are driven by the worries about a supply shortage in the future, which helps lift the whole bulk commodities market," said Xu Bo, analyst at Haitong Futures.
China's state media reported on Wednesday that the country would ban coal imports at small ports from July 1, the latest move by the country to curb arrivals of foreign product. The relative strength index, a key technical indicator, showed that the coking coal and coke markets had broken above 70, suggesting they have been overbought.
Iron ore futures extended their rally into a fourth day, increasing more than 4 percent and hitting their highest in a month at 484.5 yuan a tonne.
The most-traded rebar futures edged up over 1 percent to 3,292 yuan a tonne as optimism about demand continued to lift prices.
ANZ said activity in the physical market had picked up with 10 seaborne deals conducted on Wednesday, the busiest day in months as steel traders re-entered the market after a prolonged period on the sidelines.
Iron ore for delivery to China's Qingdao port jumped 4.4 percent to $62.33 a tonne on Wednesday, the highest level since May 22, according to Metal Bulletin.
Last week, stocks of imported iron ore at China's ports rose to 141.5 million tonnes, the highest since 2004, according to data tracked by SteelHome. ($1 = 6.7804 Chinese yuan renminbi)
(Reporting by Muyu Xu and Josephine Mason; Editing by Joseph Radford)