BEIJING: Chinese coking coal and coke futures dropped more than 3% on Tuesday, weighed down by expectation of higher supply and as demand from steel mills remained weak on thin profit margins.
A cabinet meeting chaired by Chinese Premier Li Keqiang said on Monday the country would take targeted steps to support the economy, ensuring energy security and coal supplies.
Coking coal imports from Mongolia are also resuming at some borders, analysts with Galaxy Futures wrote in a note, highlighting strong expectation of a rise in supplies.
On the demand side, profits at steel firms are relatively low amid sluggish construction activities, weighing on the steelmaking ingredients, said Galaxy Futures.
The most-active September contract of metallurgical coal on the Dalian Commodity Exchange dived 3.8% to 2,524 yuan ($379.12) per tonne, as of 0330 GMT. Coke prices fell 3.2% to 3,331 yuan a tonne. Benchmark iron ore futures on the Dalian bourse dipped 0.5% to 857 yuan per tonne after a near 7% surge on Monday.
Spot 62% iron ore, meanwhile, jumped $6.5 to $135 on Monday, data compiled by SteelHome consultancy showed. Construction-used steel rebar on the Shanghai Futures Exchange, for October delivery, slipped 1.9% to 4,549 yuan a tonne.
Hot-rolled coils used in the manufacturing sector declined 2.2% to 4,666 yuan a tonne. Shanghai stainless steel futures, for June delivery, dropped 1.4% to 18,505 yuan per tonne.
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