China's securities regulator has approved the listing of coke options on the Dalian Commodity Exchange (DCE), marking the latest addition to the country's risk management toolkit for the coal-coke-steel supply chain.

The new instrument will complement existing coke futures, coking coal futures and options, and iron ore futures and options, forming a more comprehensive hedging system for steel raw materials, the China Securities Regulatory Commission said in a notice on July 31.

China is the world's largest coke producer and consumer, with annual output exceeding 500 million tonnes, accounting for over 67% of global production. Domestic demand from steelmaking and coal chemical industries also ranks first globally.

Coke spot prices have fluctuated sharply in recent years due to multiple factors, pressuring operations of companies across the upstream and downstream supply chain. Coking plants, steel mills and traders have shown growing demand for more sophisticated risk management tools.

The DCE launched coke futures in 2011. Over more than a decade of trading, the contract has played a core role in price discovery, hedging and resource allocation. In June 2026, the exchange optimized risk control parameters for coke futures, improving market liquidity and investor structure, with the correlation between futures and spot prices reaching 0.94.

Following the adjustments, average daily coke futures volume stood at approximately 90,000 lots, with open interest of about 77,000 lots. Unit clients accounted for nearly 70% of open interest, with broad participation from coking, steel and trading companies.

Coke options will enable companies to construct strategies such as protective puts or collar strategies, locking in raw material costs or product selling prices while retaining some upside profit potential. Traders can use options to manage inventory price decline risks without paying full margin as required in futures trading, improving capital efficiency.

The exchange said it will work with market participants to advance preparations for the coke options listing, release contract rules promptly, and conduct tiered market education and industry training to guide companies in using options for price risk management.