Coking coal futures hit upper limit on supply concerns; iron ore slips on profit-taking

Coking coal futures surged to the daily upper limit on Wednesday, driven by concerns over potential supply disruptions following reports of a government inspection into coal mine production.

According to local media, the National Energy Administration (NEA) has issued a policy document outlining a verification campaign to check whether coal mines are exceeding their licensed production capacities. The inspections will cover major coal-producing regions, including Shanxi, Inner Mongolia, Anhui, Henan, Guizhou, Shaanxi, Ningxia, and Xinjiang.

The move is seen as part of Beijing’s broader “involution” campaign, a push to curb excessive, often self-defeating competition. In recent weeks, authorities have raised concerns over aggressive price wars in sectors like steel and automotive, which are adding to deflationary pressures in the economy.

Despite the rally in coking coal, iron ore futures declined, as traders appeared to lock in profits after several sessions of gains.

On the Dalian Commodity Exchange, the most-traded September iron ore contract fell 0.61pct to 812 yuan (USD 113.1) per ton. Coking coal futures hit the upper limit and closed at 1,135.5 yuan (USD 158) per ton, while coke futures jumped 3.83pct to 1,707.5 yuan (USD 238) per ton.

Steel futures on the Shanghai Futures Exchange showed a mixed performance. Rebar rose 0.31pct to 3,274 yuan (USD 456) per ton, HRC edged up 0.2pct to 3,438 yuan (USD 479), and stainless steel inched up 0.08pct to 12,900 yuan (USD 1,798) per ton. Wire rod futures, however, declined 2.17pct to 3,510 yuan (USD 489). All steel futures were down compared to the previous morning session.

1 USD / 7.17 yuan