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Coke futures a hot commodity on first day of trading
By Richard Fu |
April 15, 2011, Friday
|
Online Edition
Online Edition
THE world's first coke futures rose 3 percent on the first day of trading on China's Dalian Commodity Exchange, giving a hedge tool to producers and users of the steel-making ingredient.
The most actively traded September contract closed at 2,247 yuan (US$344) a ton, up 3.07 percent from the base price of 2,180 yuan a ton. The contract opened at 2,300 yuan, an intra-day high.
The spot price for first-grade metallurgical coke was quoted at 2,020 yuan per ton in Shanxi Province, China铆s main coke producing region, according to Hongyuan Futures.
Coke is derived from coking coal and is used to produce steel. The Dalian bourse also plans to introduce coking coal contracts.
Chinese mills supply only a third of their coke needs from their own production, according to the China Coking Industry Association. This means in the past they had to rely on the spot market for coke which fluctuated a lot.
Now, producers can sell their future production to lock in higher prices, while users can buy future needs to reduce the risk of price fluctuations in China铆s 700 billion yuan coke market.
The National Development and Reform Commission said yesterday China铆s crude steel output may reach 700 million tons this year, higher than the earlier estimated 660 million tons.
China has halted approval of coke expansion projects and will accelerate closure of obsolete factories, the NDRC said earlier this week.
The most actively traded September contract closed at 2,247 yuan (US$344) a ton, up 3.07 percent from the base price of 2,180 yuan a ton. The contract opened at 2,300 yuan, an intra-day high.
The spot price for first-grade metallurgical coke was quoted at 2,020 yuan per ton in Shanxi Province, China铆s main coke producing region, according to Hongyuan Futures.
Coke is derived from coking coal and is used to produce steel. The Dalian bourse also plans to introduce coking coal contracts.
Chinese mills supply only a third of their coke needs from their own production, according to the China Coking Industry Association. This means in the past they had to rely on the spot market for coke which fluctuated a lot.
Now, producers can sell their future production to lock in higher prices, while users can buy future needs to reduce the risk of price fluctuations in China铆s 700 billion yuan coke market.
The National Development and Reform Commission said yesterday China铆s crude steel output may reach 700 million tons this year, higher than the earlier estimated 660 million tons.
China has halted approval of coke expansion projects and will accelerate closure of obsolete factories, the NDRC said earlier this week.
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