China coking coal, coke set for 2nd weekly loss on demand worries

reuters.com Price,  futures 2019-09-27 15:56:14

Futures prices of coking coal and coke were lower in morning trade on September 27, headed for their second straight weekly loss, ahead of a long holiday in the world's top metals consumer.


Many Chinese steel mills have been ordered to shut or limit operations starting this week under a strict anti-pollution campaign as the nation prepares to mark the 70th anniversary of the People's Republic on October 1, when the week-long holidays will begin.


The most-traded coking coal on the Dalian Commodity Exchange, for delivery in January 2020, fell as much as 1.7% to 1,233.5 yuan/t and was down 4.2% for the week as traders worried about demand in the world's second-largest economy.


Coke, the steelmaking material produced by heating coking coal, dropped 1.9% to 1,856 yuan/t and was down 3.3% so far this week.


China's environment ministry warned earlier this week that "unfavourable" weather conditions would lead to a prolonged and widespread outbreak of smog stretching along the eastern coast for around two weeks.


Beyond the holidays, the demand outlook for steel products and raw materials in China is uncertain as latest economic indicators show deepening slowdown amid its bruising trade war with the United States.


China's industrial production in August fell to its weakest in 17-1/2 years, while exports tumbled.


China's factory activity is expected to have contracted for a fifth straight month in September, a Reuters poll showed.


Doubts remain on whether China and the United States would be able to settle their trade conflict soon, despite U.S. President Donald Trump's remarks on September 25 saying a deal could happen sooner than people think.


"Understandably, investors are showing little reaction (to Trump's remarks), as they have learned that things could easily turn and have gotten whip-sawed by getting ahead of their skis in the past," said Edward Meir, commodity consultant at brokerage INTL


(Writing by Emma Yang  Editing by Harry Huo)
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