BEIJING: Chinese coke futures climbed more than 3% on Monday, supported by resilient demand at blast furnaces and talks of capacity cuts in major producing provinces raising supply concerns for the steelmaking ingredient.
Capacity utilisation rates of blast furnaces at 247 steel mills rose to 92.47% as of Oct. 30 from the week earlier, according to Mysteel consultancy.
"Despite relatively low profits... steel firms are not proactively cutting molten iron output," CITIC Futures wrote in a note, adding that coke demand mainly comes from molten iron.
Coke supplies have been tight this year as newly launched capacity can't make up for cuts last year, while another 14.32 million tonnes of capacity in Shanxi province could be slashed before end-December as part of China's plan to cut over capacity of coke, it said.
The most-traded coke futures on the Dalian Commodity Exchange, for January delivery, gained as much as 3.7% to 2,258 yuan ($501.72) per tonne. The contract closed up 3.5% at 2,255 yuan a tonne.
Coking coal futures rose 1.0% to 1,339 yuan per tonne.
Benchmark iron ore futures on the Dalian bourse increased 1.9% at 801 yuan a tonne, the highest closing price since mid-October.
Spot prices of iron ore with 62% iron content for delivery to China rose by $1 to $118.5 per tonne as of Friday.
Construction steel rebar on the Shanghai Futures Exchange ended up 0.9% at 3,719 yuan a tonne.
Hot-rolled coils, used in cars and home appliances, climbed 0.5% to 3,875 yuan per tonne.
Stainless steel futures closed down 3.3% to 13,805 yuan a tonne.
Activity in China's factory sector accelerated at the fastest pace in nearly a decade in October as domestic demand surged, a private business survey showed, adding further momentum to an economy that is quickly recovering from the coronavirus crisis.
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