On August 8, futures prices of iron ore and metallurgical coke in China indicated significant increases as the market opened, mainly due to the capacity cuts in the domestic steel and coal sectors. In particular, coke futures prices increased by seven percent to RMB 1,217/mt ($183.0/mt), while iron ore futures prices rose by more than three percent to over RMB 500/mt ($75.18/mt), both compared to the close of business on Friday, August 5.
Government authorities in China at all levels have stepped up efforts to eliminate excess capacity in the second half of the year, boosting sentiment in the futures markets. In recent days, the Chinese provinces of Liaoning, Jiangxi and Jiangsu have announced plans to eliminate 13.27 million mt, 12.79 million mt and 8.18 million mt respectively of coal capacity for the whole of 2016.