BEIJING: Chinese steelmaking ingredients and other ferrous futures rose on Friday, with coking coal and coke both on course for a more than 5% weekly gain against the backdrop of strong demand at mills and supply tightness.
The most-traded coking coal futures on the Dalian Commodity Exchange, for September delivery, inched up 0.3% to 2,056 yuan ($318.04) a tonne as of 0330 GMT. They are set to gain 5.2% this week.
Coke futures on the Dalian exchange jumped 1.7% to 2,842 yuan per tonne.
Coking coal inventories held by 100 coking plants and 110 steel mills, surveyed by consultancy Mysteel, fell 3.2% to 15.7 million tonnes as of Thursday, from a week earlier due to a supply crunch amid environmental and safety production inspections.
Benchmark iron ore futures inched up 0.6% to 1,178 yuan in morning trade. Spot prices for 62% iron ore fell $2 to $217 a tonne on Thursday, according to consultancy SteelHome.
“Iron ore and steel prices are once again rising higher … amid strong demand from the Chinese steel industry and supply issues from the largest global producers,” Fitch Solutions wrote in a note.
However, an improvement in supply and weaker consumption by downstream players at current high prices are expected to cap gains in the coming months, Fitch Solutions added.
Construction steel rebar on the Shanghai Futures Exchange , for October delivery, rose 1.1% to 5,029 yuan per tonne.
Hot rolled coils, used in the manufacturing sector, increased 1.6% to 5,278 yuan a tonne.
The August contract for Shanghai stainless steel futures rose 2.6% to 16,885 yuan per tonne.
World’s top steel producer China Baowu Steel Group said late on Thursday its stainless steel unit TISCO Group has teamed up with Brazilian miner Vale and Shandong Xinhai Technology to make nickel pig iron in Indonesia.
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