BEIJING: Chinese steel futures fell on Wednesday as raw material prices plunged amid government intervention to cool commodity prices, while demand for the industrial metal stayed subdued on output controls.
The most-active coking coal and coke futures on the Dalian Commodity Exchange opened down 9% at 2,704 yuan and 3,430 yuan, respectively, hitting their daily trading limits.
The plunge came as thermal coal hit its 10% lower trading limit after the state planner said it had asked major coal producing provinces to probe and regulate illegal storage sites, and to crack down on hoarding behaviours.
Benchmark iron ore futures on the Dalian bourse, for January delivery, dropped 3.9% to 673 yuan by 0234 GMT. Spot prices of iron ore with 62% iron content for delivery to China remained unchanged at $121.5 a tonne on Tuesday, according to SteelHome consultancy.
“Affected by energy consumption controls, environmental curbs during winter heating season and the Winter Olympics... steel supply is expected to be restricted continuously, iron ore demand will be dented in the long term,” analysts with CITIC Securities said in a note.
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