China's Dalian Commodity Exchange said on July 11 it will raise the quality standards for delivery of coking coal, a key fuel for steelmaking, in order to meet market demand for high-grade industrial ingredients.
The new standards lower the allowable amount of impurities such as ash and sulphur, according to a statement on the exchange website.
According to the new standards, coking coal with 1.6% sulphur is also allowed to participate in delivery, compared with a narrower scope limiting sulfur at or below 1.4%.
Meanwhile, the ash content for coking coal is lowered to 10%, which will increase proportion of blending of coking coal for delivery.
Besides, coking coal's CSR is heightened to 60-65 from previous 50 plus, a move aimed to limit the range of blending coal. Around 70% of coal's maximum vitrinite reflectance should be within 1.0-1.6.
The bourse also set discounts for deliveries below the benchmark quality thresholds.
New delivery standards will take effective from July 2019 contract.
The modification is expected to widen coking coal grades in delivery, especially for those coals with high CSR yet high sulphur.
High-sulfur coals in Luliang, Linfen and Jinzhong cities of Shanxi province and Australian second-tier primary coking coal could all meet new standards of coking coal delivery, helping enhance market activity of these grades.
In the meantime, it will greatly encourage delivery participation of many downstream enterprises.
(Writing by Tammy Yang Editing by Jessie Jia)
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