UPDATE 1-Dalian coking coal jumps over 5% as plants ramp up output to chase profit
Updates with closing prices
By Min Zhang and Dominique Patton
BEIJING, March 17 (Reuters) - Chinese coking coal futures rose more than 5% on Wednesday to their highest in nearly a month, propped up by supply concerns and strong demand as coking plants are actively producing to chase profits despite a recent drop in spot 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, a recent breakout of the COVID-19 pandemic in Mongolia, a key coking coal supplier to China, supported 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 5.3% to 1,605 yuan ($246.85) a tonne. The contract closed up 5.2% at 1,603 yuan.
Coke futures DCJcv1 jumped 3.1% to 2,321 yuan per tonne.
Iron ore futures on the Dalian bourse DCIOcv1 inched up 0.6% to 1,068 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 rose 1.1% to 4,785 yuan a tonne.
Hot rolled coil futures SHHCcv1, used in cars and home appliances, inched 0.2% higher to 4,984 yuan.
Shanghai stainless steel futures SHSScv1 fell 0.5% to 13,955 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)
(Reporting by Min Zhang and Dominique Patton; Editing by Rashmi Aich and Subhranshu Sahu)
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