Chemical News
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China steel futures extend rally amid supply shortage
https://www.chemnet.com Oct 21,2016 Globaltimes
Coking coal prices have surged as much as 45 percent since September this year.
China has pushed supply-side reform in oversupplied sectors including coal by cutting overcapacity, a move that has unexpectedly resulted in the months-long rally in coal prices and extremely low inventories.
"It's still about the severe shortage of coal and coke while the demand from steel mills remains strong," said Jin Tao, an analyst with Guotai Junan Futures in Shanghai.
"Meanwhile, the government has no intention to largely loosen the tight grip on coal production and preferred coal mines to raise output gradually."
The domestic mining cuts also boosted Australian thermal coal spot prices to have hit $100 per ton for the first time since 2012, the trading platform GLOBALcoal reported Tuesday.
The spike in raw materials drove the most active rebar futures on the Shanghai Futures Exchange up 2.2 percent by 10:50 am Beijing time.
Iron ore futures on the Dalian Commodity Exchange edged up 0.5 percent to 437.5 yuan ($64.95) a ton.
Meanwhile, iron ore for delivery to China's Tianjin port edged up 0.3 percent to $58 a ton, according to data from The Steel Index.
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