BEIJING- Chinese coking coal futures rose more than 3 percent to a nearly one-month high on Wednesday, propped up by strong demand as coking plants are actively producing to chase profits despite a recent drop in spot coke prices.
Some steel mills started to lower their purchase price of coke for the fifth time this year by 100 yuan ($15.38) per ton to rebalance uneven profit distribution at coking plants and steelmakers.
However, profits earned by coke producers are still decent, analysts said.
“Utilization rates at coking plants increased slightly by 0.8 percent last week from the week earlier,” GF Futures wrote in a note, “coke producers are still profitable and willing to produce.”
Meanwhile, recent breakout of the COVID-19 pandemic in Mongolia, one of China’s main coking coal importers, had led traders to support prices amid supply concerns, said GF Futures.