China coking coal futures fluctuate wildly on market intervention fears

Dalian coking coal and coke futures moved in and out of positive territory on Tuesday, mirroring market unease over regulatory intervention in China to tame surging prices of coal in particular.

The most-traded January coking coal on China's Dalian Commodity Exchange rose as much as 3.9per cent before falling by up to 3.4per cent within the first two hours of trading. It was up 0.2per cent at 2,956 yuan (US$463) a tonne by 0300 GMT.

Coke - the processed form of coking coal and the primary reducing agent for key steelmaking ingredient iron ore, rose 3.3per cent to 3,800 yuan a tonne, after slumping 2.4per cent in early trade.

"The collective price of coal-related futures has turned from strong to weak," analysts at Sinosteel Futures wrote in a note, attributing the market volatility to Beijing's resolve to ensure supply and stabilize prices.

"They will implement intervention measures on coal prices in accordance with the law, causing market panic," they said.

On Tuesday, China's top economic planner - the National Development & Reform Commission (NDRC) - said it was studying a mechanism to stabilise coal prices over the long run, in its latest move to cool the red-hot market.

That followed the agency's statement on Friday saying it would send teams of inspectors to major coal producing regions to probe the costs of coal production and circulation.

Tight supply in China, the world's biggest steel producer, propelled coking coal and coke prices to record peaks earlier this month.

Dalian iron ore opened weaker but later rose as much as 2per cent, while the benchmark contract on Singapore Exchange was up 2.2per cent.

Construction steel rebar on the Shanghai Futures Exchange slipped 0.6per cent, while hot-rolled coil shed 1.7per cent, under pressure after China said it would roll out a pilot real estate tax cent2Cper cent20Octper cent2023per cent20,officialper cent20Xinhuaper cent20newsper cent20agencyper cent20reported.&text=Butper cent20analystsper cent20sayper cent20theper cent20taxper cent20willper cent20bringper cent20inper cent20muchper cent20neededper cent20revenue in some regions. 

Stainless steel rose 1.2per cent.

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