Coking coal futures slumped on Monday after the Dalian Commodity Exchange (DCE) announced new trading restrictions aimed at curbing speculative activity, prompting investors to take profits.
Effective from the night trading session on July 28, 2025, the DCE will cap daily opening volumes for non-futures company members or customers at 500 lots for the most-active September coking coal contract, and 2,000 lots for other coking coal futures. The daily opening volume includes the total number of buy and sell positions opened on a single contract each day.
Following the announcement, traders rushed to close long positions, ending a seven-day rally fueled by expectations of tightening supply. The rally had been driven by inspections ordered by the National Energy Administration at major coal-producing hubs to curb overproduction.
The sharp decline in coking coal prices weighed on other steel-related commodities, including iron ore.
Despite the correction, the near-term outlook for iron ore remains positive, supported by strong steel mill margins, firm domestic consumption, and robust exports in the first half of 2025. Bloomberg Intelligence reported a 4.3pct YoY increase in steel consumption, led by demand from the auto and machinery sectors. Although the construction sector remains weak, exports have continued to defy trade headwinds.
The steel sector outlook also remains positive, as Beijing takes concrete steps to address overcapacity in key industries. Expectations of large-scale infrastructure projects, such as the construction of China’s mega-dam in Tibet, have further boosted sentiment. According to UBS, over 60pct of steelmakers are now profitable, up from just 30pct a year ago.
Recent government pledges to rein in aggressive price competition have also been seen as a positive signal for the steel industry’s stability and long-term growth.
Iron ore futures also declined, with the September contract falling 1.75pct to 786 yuan (USD 109.70) per ton. The most-traded coking coal contract plunged 11pct to hit its limit down at 1,100.5 yuan (USD 154) per ton. Coke futures dropped nearly 8pct to 1,608.5 yuan (USD 225) per ton.
On the Shanghai Futures Exchange, rebar futures fell 2.05pct to 3,248 yuan (USD 453), HRC dropped 2.3pct to 3,397 yuan (USD 474), wire rod slid 2.92pct to 3,487 yuan (USD 487), and stainless steel eased 0.73pct to 12,840 yuan (USD 1,793) per ton.
1 USD / 7.16 yuan
CHINESE STEEL FUTURES
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Date: 7/28/2025 |
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| Material | Closing Price (in yuan) |
Difference from Night Session (pct) |
Difference from Previous Morning Session (pct) |
| Wire Rod | 3,487 |
-2.92 |
-3.27 |
| HRC | 3,397 |
-2.30 |
-3.24 |
| Rebar | 3,248 |
-2.05 |
-3.33 |
| Stainless Steel | 12,840 |
-0.73 |
-1.48 |
| Iron Ore | 786 |
-1.75 |
-2.10 |
| Coke | 1,608.5 |
-7.98 |
-9.61 |
| Coking Coal | 1,100.5 |
-11.00 |
-14.40 |
