January 31, 2019 / 8:23 AM / 3 months ago

UPDATE 1-Chinese coking coal soars to 17-month peak on supply concerns

* Traders worry imports ban on coking coal

* Iron ore prices climb to nearly 17-mth peak in early trade

* Steel prices edge down ahead of Lunar New Year holiday (Recasts, updates prices)

By Enrico Dela Cruz and Muyu Xu

MANILA/BEIJING, Jan 31 (Reuters) - China’s coking coal futures jumped nearly 5 percent on Thursday to a near 17-month high, spurred by concerns over tight supply amid expectation of import restrictions on the commodity.

An industrial website reported that some ports in northeastern China have stopped customs clearings on imported coking coal.

Customs at the ports mentioned in the report told Reuters that “we have not received such notice”.

Coal imports in China were curbed in December last year as the government aimed to cap the full-year shipments at the 2017 level. Traders also expected coal arrivals to remain low in January as Beijing may continue to limit imports to boost domestic coal prices.

China brought in 64.9 million tonnes of coking coal in 2018, down 6.4 percent from the previous year.

“There is no clear statement saying what the policy on coal imports will be this year... So I’ve told my clients not to make any orders from overseas until we figure out what will happen,” said a coking coal broker in the southern province of Zhejiang.

Benchmark Dalian coking coal prices soared as much as 4.8 percent to 1,275 yuan ($190.25) a tonne, their highest since Sept. 4, 2017. They were up 4.3 percent at 1,269 yuan when the market closed at 0700 GMT.

Meanwhile, the most-active iron ore contract on the Dalian Commodity Exchange rose for a sixth straight session on Thursday to their highest in nearly 17 months, as concerns over supply disruptions in the wake of a mining disaster in Brazil persist.

It settled up 1.8 percent at 588.5 yuan a tonne.

“People are still worried that the supply-side may still have some trouble because of Vale’s decision to cut production,” said a Shanghai-based trader.

“But there could be some profit-taking ahead of the Chinese New Year holiday next week because we don’t know what could happen during the market break.”

Brazil’s Vale SA, the world’s largest iron ore miner, on Tuesday said it would take up to 10 percent of its output offline as it decommissions a total of 19 dams over three years, including an additional 10 following last week’s deadly tailings dam burst.

Vale’s move would cut up to 40 million tonnes of iron ore production a year.

“I don’t think Australia has enough additional supply especially for the iron ore grade similar to the quality of Vale’s output,” said the trader in Shanghai.

The dam failure may knock Vale off its perch as the biggest iron ore exporter as the resulting rally in high-grade ore prices steers buyers towards rivals offering cheaper ore, according to analysts and traders.

Spot iron ore for delivery to China SH-CCN-IRNOR62 jumped 8.2 percent to $85.30 a tonne on Wednesday, according to SteelHome consultancy.

The most-active rebar contract on the Shanghai Futures Exchange was down 0.4 percent at 3,707 yuan a tonne. Hot rolled coil also fell 0.4 percent to 3,610 yuan.

$1 = 6.7018 Chinese yuan Reporting by Enrico dela Cruz in MANILA and Muyu Xu in BEIJING; Editing by Joseph Radford and Subhranshu Sahu

Nuestros Estándares:Los principios Thomson Reuters
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