China's coking coal futures fall on slow demand

Coking coal futures in China fell almost 4 percent on Thursday and iron ore also slipped, pressured by worries that demand for steel in the world's top consumer may be weaker than expected during this time of the year. Worries over trade tensions between China and the United States also weighed on investor sentiment. China's commerce ministry said trade negotiations with the United States would be impossible as Washington's attempts at dialogue were not sincere, and vowed to retaliate should US President Donald Trump escalate current tensions.
The most-traded September coking coal on the Dalian Commodity Exchange closed down 3.9 percent at 1,124.50 yuan ($179) a tonne and coke slid 3 percent to 1,731.50 yuan. Both initially fell to two-week lows. Iron ore dropped 0.9 percent to end at 450 yuan per tonne. While a sustained drop in steel inventories at Chinese traders suggested demand has been picking up, "we're still waiting for a larger scale improvement," said Richard Lu, an analyst at CRU consultancy.
"The steel price has been going up and down at the moment because we haven't seen a very solid improvement in demand," said Lu. The most-active October rebar on the Shanghai Futures Exchange eased 0.6 percent to 3,402 yuan a tonne. Stockpiles of rebar, a construction steel product, among Chinese traders fell for a third consecutive week last week, easing to 8.73 million tonnes from a five-year high of nearly 10 million tonnes in mid-March, data compiled by SteelHome consultancy showed.
Concerns over trade frictions between China and the United States continued to dampen sentiment. In particular, CRU's Lu said investors are more worried about the US tariffs aimed at forcing changes to Chinese government policies designed to transfer US intellectual property to Chinese companies. "They will impact the macroeconomy in China, so people are more worried about that," he said. Iron ore for delivery to China's Qingdao port slipped 0.8 percent to $64.79 a tonne on Wednesday, according to Metal Bulletin.