BEIJING: Chinese ferrous futures were set on Friday for big weekly drops as markets extended a sell-off triggered by signals Beijing may intervene to cool surging coal prices. The most actively traded coking coal contract on the Dalian Commodity Exchange, for January delivery, was down 9.9% at 2,914 yuan ($455.32) a tonne by 0330 GMT, after tumbling 12% earlier in the session.
The contract has declined 19% so far this week, giving up the gains made since late September and heading for its biggest weekly drop since the week ended April 14, 2017. Coke prices on the Dalian bourse dropped 7.4% to 3,625 yuan per tonne.
China has stepped up regulations and investigations amid surging coal prices, pledging to crack down on irregularities that disrupt market order, and will study measures to prevent coal firms from seeking excessive profits and bring coal prices back to a reasonable range.
"Policies towards the coal sector to ensure supplies and stabilise prices are strengthening," analysts with SinoSteel Futures wrote in a note, adding market participants were wary of high prices and withdrawing their money.
Benchmark iron ore futures dipped 0.6% to 696 yuan a tonne, tracking a drop in spot 62% iron ore, which fell to $120.5 a tonne on Thursday, according to SteelHome consultancy.
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