CHINA’S coking coal futures rose for the first time in six trading sessions yesterday, surging more than 14 percent on big backwardation amid tight supplies, while coke prices also jumped.

“Steel production costs are very high now. Mills and coking plants are gaming how much room is there left for further adjustment between spot and futures prices,” said Wang Yingwu, analyst with Huatai Futures in Beijing, adding that profits at coking plants are also thin now.

Current coke prices are around 1,100 yuan (US$171.90) per ton higher than the January futures contract, while spot coking coal prices are also several hundreds yuan higher, according to a Huatai Futures note.

The most actively traded coking coal futures on the Dalian Commodity Exchange soared as much as 14.1 percent to 2,507 yuan (US$391.80) per ton, the biggest percentage change since Nov. 22, 2016. They ended up 12.7 percent at 2,477 yuan a ton.

Coke futures on the Dalian bourse powered 8 percent to 3,215 yuan per ton at close, after gaining as much as 9.5 percent earlier during the session.

Benchmark iron ore futures on the Dalian exchange dipped 0.4 percent to 590 yuan a ton. Spot 62 percent iron ore for delivery to China declined US$5 to US$102 per ton Tuesday, data from SteelHome consultancy showed.

Steel prices on the Shanghai Futures Exchange were mixed.

Construction rebar inched 0.1 percent lower to 4,385 yuan a ton while hot rolled coils used in the manufacturing sector rose 1.6 percent to 4,782 yuan per ton.

Shanghai stainless steel futures, for December delivery, faltered 0.9 percent to 18,565 yuan a ton. (SD-Agencies)