MANILA: Metallurgical coal prices in top steel producer China rose on Tuesday to their highest in more than three months, shrugging off weakness in the broader ferrous market, as concerns grew over tightening supply.
Coal companies in Shanxi, China’s top coal producing province, plan to suspend production ahead of the ruling Communist Party congress beginning Oct. 16, traders said. Covid-19 restrictions in Shanxi as China steps up efforts to contain outbreaks ahead of the crucial policymakers’ gathering, could tighten the steelmaking ingredient’s supply, they said.
Flood warnings in key coal supplier Australia also added to the supply concerns, analysts said. “The supply side of coking coal will tighten again, which will provide strong support for coal prices,” Huatai Futures analysts said in a note. The most-traded January coking coal on the Dalian Commodity Exchange rose as much as 2.1% to 2,233 yuan ($310.60) a tonne, its strongest since June 30.
Dalian coke, however, shed 1.1%, after also touching its highest since June 30.
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