Rise of China’s Xinjiang as coal hub undercuts climate goals
Output has surged 22% this year, the fastest growth of any region in China.
Chinese coking coal futures pulled back from early gains and logged the first weekly losses in a month after Beijing said it would look into coal prices and crack down on speculations.
China’s state planner said on Friday afternoon that it had jointly launched an investigation into coal prices with the market regulator and will crack down on speculation and hoarding.
The most-traded coking coal futures on the Dalian Commodity Exchange, for September delivery, jumped 4.3% in morning session to over a month high and closed down 1.4% to 1,955 yuan ($303.48) a tonne. The contract fell 1.4% for the week.
Other steelmaking ingredients also ended lower.
Benchmark iron ore futures dipped 0.2% to 1,203 yuan a tonne.
Coke futures on the Dalian bourse fell 0.9% to 2,694 yuan per tonne.
Steel prices on the Shanghai Futures Exchange, however, were traded higher, although data from Mysteel consultancy showed that apparent demand for steel products fell 4.8% as of June.17 from the week earlier.
“Despite historical tendencies for steel prices to cool in June when construction activity usually slows in China, prices have continued to rise due to investor speculation of a supply crunch on the back of government efforts to lower steel production,” Fitch Solutions wrote in a note, adding that they are not expecting output to slow down this year.
Construction steel rebar, for October delivery, edged up 0.2% to 5,061 yuan a tonne.
Hot rolled coils were up 0.7% to 5,347 yuan per tonne.
Shanghai stainless steel, for July delivery, rose 0.4% to 16,155 yuan per tonne.
($1 = 6.4419 Chinese yuan renminbi)
(By Min Zhang and Dominique Patton; Editing by Shailesh Kuber)
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