China's Jiangsu province is considering shutting small coke plants along the Yangtze River and near Lake Tai, as the eastern province steps up its campaign against pollution, an official at the provincial government familiar with the matter said.
The move is part of a broader anti-pollution proposal being considered by the provincial government, said the official, who declined to be named as he is not authorized to speak to the media.
Jiangsu province is China's second-largest steel producing region and its output of coke, used to smelt iron ore in blast furnaces, accounts for 5 percent of the country's total on average.
Coke futures prices jumped more than 3 percent on Friday to 2,068 yuan($325.99) per tonne as investors bet that the proposal will reduce coke supplies, two traders said.
The latest proposal is likely to increase costs for steel mills. Bringing in coke from elsewhere could also add to pressure on the country's rail system after China cracked down on diesel trucks carrying bulk commodities in many regions.
It is not known when the authorities will make a final decision, the official said.
The Jiangsu state planner did not respond to a request for comment.
($1 = 6.3438 Chinese yuan renminbi)
