Coking coal slides to 5-month low on weak ferrous market
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BEIJING, April 10 (Reuters) - Chinese coking coal futures fell nearly 4% on Monday, after steel mills sought lower prices for the ingredient for the second time this month, sending another bearish signal to the fragile ferrous market. Steel mills in northern China's Tangshan city planned to lower their purchase price of coke by between 50 yuan ($7.27)and 100 yuan a tonne from April 10, said analysts at consultancy Mysteel on Monday, following a reduction of 100 yuan in coke prices last week.
The pricing proposal is expected to be followed by mills elsewhere, they said. The most-traded May coking coal futures contract on the Dalian Commodity Exchange (DCE) DJMcv1 was 3.78% lower at 1,694.5 yuan ($246.42)a tonne as of 1015 GMT. Coke DCJcv1 fell 2.97% to 2,464 yuan a tonne.
Abundant supply and subdued demand has put coking coal and coke markets under pressure. "Fundamentals of the (coking coal and coke) market are very weak, and prices had been supported by expectation of a pick-up in steel demand," said a ferrous market analyst at a Shanghai-based securities firm who declined to be identified as he is not authorized to speak to media.
"When the actual (steel) demand showed signs of being weaker than expected, it is no surprise to see the prices slump," he added. Dalian and Singapore iron ore futures were mixed on Monday, with participants still seeking clear direction. The most-traded September iron ore futures contract on the DCE DCIOcv1 traded 0.44% lower at 788 yuan a tonne. On the
Singapore Exchange, the benchmark May iron ore SZZFK3 was, however, 0.37% higher at $117.95 a tonne, as of 0227 GMT.
Weakness in the raw materials markets permeated into the downstream steel market too.
Rebar on the Shanghai Futures Exchange SRBcv1 declined by 1.08% to 3,940 yuan a tonne, hot-rolled coil SHCCcv1 shed 0.74%, wire rod SWRcv1 edged down 0.22% and stainless steel SHSScv1 dipped 0.27%.
(Source : Reuters)
