Coking coal futures in China erased gains to edge lower on Thursday even as supply was disrupted after the southwestern province of Guizhou ordered smaller mines to halt production, while iron ore futures jumped nearly 2%.
The Guizhou province instructed coal mines with an annual capacity of less than 300,000 tonnes to suspend production after an accident killed 16 people, state media Xinhua said on Wednesday.
The most-actively traded coking coal futures on the Dalian Commodity Exchange, for January 2020 delivery, jumped as much as 1.4% to 1,260 yuan per tonne, before slipping 0.6% to 1,236 yuan per tonne at close.
"Prices for coking coal are expected to see some gains in the near term, as the suspension of small mines in Guizhou disrupted supplies," said Helen Lau, mining and metals analyst at Argonaut Securities.
Meanwhile, overall demand in China is good in the fourth-quarter, which should boost prices of steelmaking ingredients, Lau added.
Benchmark iron ore futures, for May 2020 delivery, closed up 1.9% at 648 yuan per tonne, recovering some of the losses recorded in the previous two sessions.
Coke futures on the Dalian exchange, for May 2020 delivery, jumped 1.6% to 1,888 yuan per tonne.
Prices for spot cargoes of iron ore with 62% iron content for delivery to China fell to $94.5 per tonne on Wednesday.
Construction rebar on the Shanghai Futures Exchange , for May 2020 delivery, rose 1% to 3,518 yuan per tonne.
Hot-rolled coil, used in cars and home appliances, edged up 0.06% to 3,544 yuan per tonne.
Shanghai stainless steel, for February 2020 delivery, gained 0.8% to 14,395 yuan per tonne.
Brazilian miner Vale SA signed a service agreement with China's Ningbo Zhoushan Port to jointly launch a new iron ore product GF88, the Chinese port company said on Wednesday. China unveiled a new list of tariff exemptions for imports from the United States, days after the world's two biggest economies announced a Phase 1 trade deal.
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