Coking coal prices in China tumbled to a seven-month low on Wednesday, weighed down by prospects of higher supply and sustained weakness in demand for the steelmaking raw material, while fresh hopes of economic stimulus supported iron ore.
The most-traded September coking coal contract on the Dalian Commodity Exchange ended daytime trade 6.7% lower at 1,922.50 yuan ($284.78) a tonne, after hitting 1,885.50 yuan, its weakest level since Dec. 13.
Coke, the processed form of coking coal used in iron ore smelting, shed 3.6% to 2,590.50 yuan a tonne.
“Demand for raw materials has declined due to a reduction in steel mill production,” Sinosteel Futures analysts said in a note.
Top steel producer China aims to reduce output for a second consecutive year in line with its decarbonisation goals. Steel mills have also cut production more decisively due to weak demand as COVID-19 restrictions curbed economic activity and bad weather hampered…