BEIJING (Reuters) - China’s thermal coal prices jumped more than 4 percent on Tuesday and were on track for their biggest one-day gain since November 2016 as investors continued to fret about supplies due to strong demand.
Investors piled on bullish bets even after Beijing intervened last week to try and boost supplies in an effort to snuff out the red-hot rally, which the government says is not supported by fundamentals.
At 11:09 a.m. (0309 GMT), the most-active futures for delivery in September were up 4.4 percent at 628.2 yuan ($97.97) per tonne. They earlier traded as high as 628.6 yuan.
China’s state planner’s order for utilities to stop stockpiling coal and for miners to slash prices triggered a big sell-off last week.
But with inventory at power plants and major ports lower than last year’s levels and the operating rates higher, analysts said worries about supplies linger.
“We doubt (the) government’s intervention will be effective, because no matter to what extent they can regulate supplies, it is hard to repress demand,” Argonaut analysts said in a research note.
Reporting by Josephine Mason