BEIJING (Reuters) - Chinese coking coal prices hit a 13-month high on Friday, spurred by expectations of short supply due to safety inspections at coal mines and firm demand at steel mills.
The most-active coking coal futures on the Dalian Commodity Exchange hit 1,433 yuan ($205.97) a ton when the market opened, a level last seen in September 2017. The contract closed 1.1 percent higher at 1,409 yuan.
China’s coal mine safety watchdog said this week it will inspect all mines across the country from late-October to end-June next year in a bid to improve safety conditions.
The move follows a coal mine accident in eastern Shandong province last Sunday that killed eight people. So far, 41 coal mines in the province have been ordered to halt production for security checks.
Prices for coking coal, a key steelmaking raw ingredient, have also been bolstered by strong demand from steel mills racing to churn out more product ahead of winter production cuts.
The weekly utilization rate of blast furnaces at steel mills across China held above 68 percent in the week to Oct. 26, according to data compiled by consultancy Mysteel. It dipped 0.14 percentage points from a week earlier to 68.23 percent, as steel makers in smog-prone Hebei province were ordered to halve production during an emergency pollution alert.
Prices of other raw materials also rose on Friday. Coke futures edged up 0.1 percent to 2,437 yuan a ton, while iron ore for January delivery rose 1.2 percent to 538.5 yuan.
Benchmark construction steel rebar on the Shanghai Futures Exchange extended gains for a fifth day to reach a six-week high amid falling inventory. Rebar was up 1.2 percent at 4,228 yuan a ton.
According to Mysteel data, weekly stockpiles of steel products at Chinese traders fell 490,700 tonnes to 9.8 million tonnes as of Oct. 26, with rebar inventory dropping 8.2 percent and hot-rolled coil dipping 0.5 percent.
Reporting by Muyu Xu and Dominique Patton; Editing by Richard Pullin and Sherry Jacob-Phillips