As Beijing's flexibility on its industrial production curbs drove up demand, Chinese coking fuel futures reached their highest pricing in more than a year Oct. 17, Reuters reported.

China started allowing individual provinces to set their own output restrictions for industrial plant production this winter, including at steel mills.

"This means that overall demand for steelmaking raw materials will be more than expected even though there will be some constraints," Richard Lu, an analyst at CRU consultancy in Beijing, told Reuters. "So that's providing some upside for prices." With transporting thermal coal given higher priority than coking coal over the winter, coking coal supply will become more restricted, Lu said.

Another constraint on supply is the fire at Peabody Energy Corp.'s North Goonyella mine in Australia, which has idled the mine and driven down Australian metallurgical coal exports. Australia is one of China's top providers of metallurgical coal.

The most-traded January coking coal contract on the Dalian Commodity Exchange saw an increase of up to 3.5%, jumping to 1,412.50 yuan per tonne before settling at 1,399.50 yuan. Iron ore futures settled at 523.50 yuan per tonne, the highest since March 8, while coke closed at 2,513 yuan. Construction steel product rebar on the Shanghai Futures Exchange settled at 4,197 yuan per tonne, its highest level since Sept. 19.

As of Oct. 17, US$1 was equivalent to 6.9272 Chinese yuan.