By Enrico Dela Cruz
Coking coal futures in China held firm on Thursday, supported by concerns over limited supply of the steelmaking input and in the absence of any major progress regarding shipments from Australia after discussions over trade blockages.
Australian Foreign Minister Penny Wong met her Chinese counterpart, Wang Yi, in Beijing on Wednesday, as the two trading partners seek to stabilise and reset frosty diplomatic relations.
The most-active May coking coal contract on China’s Dalian Commodity Exchange was up 0.6% at 1,888 yuan ($270.54) a tonne as of 0231 GMT. It fell as low as 1,822 yuan on Monday, the weakest since Dec. 8, ahead of Wong’s Beijing trip.
“(The) visit to China has ended and no substantial progress has been made on trade issues,” Zhongzhou Futures analysts said in a note. There had been speculation in the market that China, the world’s top coal buyer, might end its unofficial ban on imports of Australian coal, traders said.
The focus has shifted back to supply fundamentals, analysts said, with prices of steelmaking ingredients also supported by expectations of improved steel demand in China amid a steady stream of growth-supportive rhetoric from Beijing.
Top global steel producer China will implement policy measures to support the economy and aim for an improvement in growth in early 2023, state media on Wednesday quoted the cabinet as saying.
Rebar on the Shanghai Futures Exchange rose 0.6%, hot-rolled coil climbed 0.7%, and wire rod gained 0.5%. Stainless steel dipped 0.3%.
Coke, the processed form of coking or metallurgical coal, was little changed at 2,708 yuan a tonne.
Dalian iron ore’s benchmark May contract climbed 2% to 828 yuan ($118.65) a tonne.
But the most-traded January iron ore contract on the Singapore Exchange slipped 0.1%, reflecting continuing pressure on near-term prices as China grapples with COVID-19 outbreaks.
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