MANILA: Chinese coking coal and coke futures fell on Friday, pulling back from record highs scaled a session earlier, although the steelmaking ingredients were set for more than 10% weekly gains. Coking coal on China's Dalian Commodity Exchange dropped as much as 4.6% to 2,453 yuan ($378.26) a tonne after a seven-session rally. Coke shed as much as 5.6% to 3,074.50 yuan a tonne following a four-day advance.
Their most-active January contracts, however, were up 11.1% for coking coal and 10.9.% for coke this week. Friday's pullback comes after reports Chinese authorities have vowed to closely monitor market activities and punish speculators.
"(Coking coal) supply issues in China and Mongolia as well as an import ban on Australian coal are factors driving up prices to ridiculous levels," said Erik Hedborg, an iron ore analyst at commodities consultancy CRU.
Coke, the processed form of coking coal, is a reducing agent in melting iron ore, the key steelmaking ingredient. Among iron ore products, lump is more coke-intensive than pellets and fines.
Top steel producer China's demand for iron ore lump in particular has collapsed due to higher coal and coke prices, Hedborg said.
Analysts said coking coal supply concerns in China grew this week with the closure of border with Mongolia, amid weak output from local mines due to environmental campaigns and safety checks.
"Chinese steelmakers have no option but to look to Russia, Canada and the US as the next-best option to source their coking coal," said Julien Hall, regional metals pricing director at S&P Global Platts.
Dalian iron ore slipped 0.5% after a four-day advance, but was up 7.8% for the week following five straight weekly losses. Iron ore on the Singapore Exchange was up 0.2% at $153.60 a tonne, as of 0411 GMT. Rebar on the Shanghai Futures Exchange fell 0.4%, while hot-rolled coil lost 0.8%. Stainless steel I dropped 1%.
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