BEIJING: China’s coking coal futures slumped for a tenth straight session on Monday, dragged by weakening demand for the raw material and easing concerns over supply in the world’s top steel producer.

The most-active coking coal contract with May expiry on the Dalian Commodity Exchange ended daytime trading down 2% at 1,499.50 yuan ($232.12) a tonne, after earlier hitting 1,488.50 yuan, its lowest level since December 1.

Demand for steel products and raw materials in China is expected to further weaken as the country heads for a week-long Spring Festival holiday from February 11.

Demand for steelmaking inputs has also been crimped by falling steel profit margins due to high raw material costs and seasonally weak steel demand in China, Sinosteel Futures analysts said in a note.

“Steel mills in some regions have begun to implement different levels of maintenance on blast furnaces” to cope with the margin squeeze, they said.

The pressure on Dalian coking coal emerged following a Jan. 15 report that China was considering allowing some Australian coal shipments stranded at ports to be unloaded.

China, which has a strained relationship with Canberra over trade, politics and the origins of the new coronavirus, did not allow any coal cargoes from Australia to pass customs clearance in December.

About 70 ships containing an estimated 6 million tonnes of Australian thermal and metallurgical coal were sitting off the coast of China waiting to unload, according to ANZ commodity strategists.

They added unloading the stranded cargoes “provides hope for struggling Chinese steel mills”, which had scrambled for alternative coal sources due to restrictions on Australia.

Both Dalian coke and Dalian iron ore dropped 0.8% after a volatile session.

Iron ore on the Singapore Exchange fell 1.2% by 0722 GMT.

Rebar on the Shanghai Futures Exchange dipped 1.2%, while hot-rolled coil lost 1.5%. Stainless steel climbed 1.2%.—Reuters