On January 16, coking coal options officially commenced trading on the Dalian Commodity Exchange (DCE). As the first derivative instrument launched by DCE this year, the introduction of coking coal options not only signifies a new phase in China's risk management system for the coal-coking-steel industry chain but also provides real enterprises with more refined and diversified “insurance” tools to navigate sharp price fluctuations.

According to listing details published on the DCE website, the first batch of 32 contracts for the main coking coal options contract month 2605 were listed. This includes 16 call options and 16 put options, with strike prices ranging from 1,040 RMB/ton to 1,340 RMB/ton, spaced at intervals of 20 RMB/ton.

Coking coal serves as a core foundational raw material for the steel and coal chemical industries. China stands as both the world's largest producer and consumer of coking coal. Data indicates that in 2024, China's main coking coal output reached 165 million tons, accounting for 53% of global production, while consumption surged to 206 million tons, representing 63% of global consumption. Against this backdrop, enterprises increasingly demand efficient and flexible risk management tools.

Since its launch in 2013, coking coal futures have operated smoothly with strong liquidity, becoming a vital hedging tool for enterprises across the industrial chain. In 2025, coking coal futures recorded an average daily trading volume of 1.06 million lots and an average daily open interest of 680,000 lots, with a futures-spot price correlation reaching 97%. The launch of coking coal options now comes at an opportune moment, complementing the 13-year-old futures market to establish a multi-dimensional risk management system combining futures and options.

Previously, the Dalian Commodity Exchange (DCE) announced that the first batch of coking coal options contracts will be based on nine monthly futures contracts ranging from JM2604 to JM2612. On the first trading day, the options will undergo a pre-opening auction from 8:55 to 8:59, with regular trading commencing at 9:00. Night trading sessions will be conducted concurrently that evening. Trading fees for coking coal options are set at RMB 0.5 per contract. Exercise (settlement) fees follow the same structure as trading fees, while hedging transactions incur half the standard fee. Position limits are capped at 8,000 contracts, with a market maker system implemented to enhance liquidity. Regarding exercise, clients may submit applications during trading hours on each session day and between 15:00–15:30 on the expiration date for: clients may submit applications for “exercise,” “hedging and closing of both long and short option positions,” “hedging and closing of both long and short futures positions after exercise,” and “hedging and closing of both long and short futures positions after fulfillment.” During trading hours on the expiration date and from 15:00 to 15:30 on the expiration date, clients may also submit “forfeiture” applications.

Multiple industrial enterprises have indicated that they have formulated clear option application plans in response to the listing of coking coal options. Shanxi Yaxin Energy Group plans to establish virtual inventory by selling put options in the price bottom zone, adopt a “sell call + buy put” combination to hedge risks in the high-price range, and explore option-embedded trading models. Zhixu Coal Preparation Co., Ltd. in Zhongyang County intends to adopt an “80% futures-based hedging + 20% options-based flexible adjustment” strategy to balance core risk locking and cost optimization. Shanxi Kaijia Energy Group stated it will use options as a complementary tool to futures, focusing on reducing capital pressure and enhancing risk control precision.

Industry experts note that the launch of coking coal options helps stabilize corporate operational expectations, guide resource optimization, provide financial support for the coal industry's green transition, and drive high-quality development across the coal-coke-steel sector.

Today marks the official launch of coking coal options. As market participants gradually familiarize themselves with and utilize this new tool, China's commodity derivatives market will further enhance its capacity to serve the real economy, ushering the coal-coke-steel supply chain into a new era of more mature and refined risk management.

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