Dalian coking coal leaps as plants ramp up production to chase profit
By Min Zhang and Dominique Patton
BEIJING, March 17 (Reuters) - Chinese coking coal futures rose more than 3% to a nearly one-month high on Wednesday, propped up by strong demand as coking plants are actively producing to chase profits despite a recent drop in spot coke prices.
Some steel mills started to lower their purchase price of coke for the fifth time this year by 100 yuan ($15.38) per tonne to rebalance uneven profit distribution at coking plants and steelmakers.
However, profits earned by coke producers are still decent, analysts said.
"Utilisation rates at coking plants increased slightly by 0.8% last week from the week earlier," GF Futures wrote in a note, "coke producers are still profitable and willing to produce. "
Meanwhile, recent breakout of the COVID-19 pandemic in Mongolia, one of China's main coking coal importers, had led traders to support prices amid supply concerns, said GF Futures.
The most-traded coking coal futures DJMcv1 on the Dalian Commodity Exchange, for May delivery, gained as much as 3.4% to 1,577 yuan ($242.54) a tonne. The contract gained 3.0% to 1,570 yuan as of 0330 GMT.
Coke futures DCJcv1 increased 1.4% to 2,281 yuan per tonne.
Iron ore futures on the Dalian bourse DCIOcv1 inched up 0.7% to 1,069 yuan a tonne.
Spot prices of iron ore with 62% iron content for delivery to China SH-CCN-IRNOR62, compiled by SteelHome consultancy, rose by $2 to $166 a tonne on Tuesday.
Construction steel rebar on the Shanghai Futures Exchange SRBcv1 edged up 0.3% to 4,747 yuan a tonne.
Hot rolled coil futures SHHCcv1, used in cars and home appliances, dipped 0.2% to 4,960 yuan per tonne.
Shanghai stainless steel futures SHSScv1 fell 0.4% to 13,965 yuan a tonne.
* Brazilian iron ore miner Vale SA VALE3.SA said on Tuesday it had gradually started operations at a waste filtering plant in the Vargem Grande complex. nS0N2K8002
($1 = 6.5020 Chinese yuan renminbi)
(Reporting by Min Zhang and Dominique Patton; Editing by Rashmi Aich)
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