Short-Term Support:

Roughly 2.35 million tons of molten iron output per day is expected to remain stable, aligning with current coking coal supply levels. Consequently, coking coal prices retain underlying support, with limited market risks.

Mid-Term Shift:

As steel mills face intensifying loss pressures, a significant decline in molten iron output could reverse the supply-demand dynamics for coal and coke.

According to Sina Finance, coking coal and coke have recently shown signs of rebounding. By market close, the main coking coal futures contract rose 2.38%, indicating improved market sentiment.

Spot market sentiment for coking coal remains relatively strong. Current spot coking coal supply remains relatively tight, reflected in upstream coal enterprises holding inventories at low levels for this time of year. The current inventory structure continues to favor price increases. Additionally, mines have ample orders, with November coking coal contracts largely finalized. Mines are holding firm on prices, and coking coal bidding prices have continued to rise in recent days.

Although some mines in Inner Mongolia resumed production last week, the overall operating rate of open-pit mines in Wuhai remains low, leading to tight local coking coal resources.

Some mines in Shanxi are gradually completing their annual production targets, particularly those that previously exceeded quotas, with plans to gradually reduce output in the latter part of the year.

On the policy front, the Ministry of Emergency Management will conduct central safety production inspections in November, potentially further restricting coal production capacity in the later period, which could boost market sentiment.

Regarding product mix, medium- and low-sulfur supplies are currently tighter, with the market lacking sufficient medium- and low-sulfur resources for desulfurization. Prices for these grades have risen more significantly, driving overall domestic coking coal prices upward. Recent imports of Inner Mongolia coal have rebounded, currently maintaining around 1,400 railcars. However, the proportion of imported Grade 5 coking coal remains low, with Grade 1/3 and Grade 4 coal accounting for a larger share. High-quality low-to-medium sulfur resources remain scarce.

Nevertheless, certain risks persist in the market. Traders have accumulated substantial inventories recently, though most are off-balance-sheet. Intermediate stockpiles are gradually building up, awaiting opportunities for release.

Steel mills are facing mounting profit pressures. Rebar production in Hebei has entered loss territory, while hot-rolled coil margins hover near breakeven. Although cash flow pressures have not yet materialized, the risk of production cuts by steel mills is rising, casting a downward shadow over coking coal and coke demand.

Last week, Australian coal offered import windows and arbitrage opportunities, triggering a surge in domestic orders. Approximately 1 million tons of Australian coal are expected to arrive in concentrated shipments starting early December, adding incremental supply.

Looking ahead, the market anticipates November's average daily iron production to remain around 2.35 million tons, matching the iron output achievable with coking coal supplies.

In the short term, coking coal retains support, with no significant downside risk in futures prices. However, as steel mills' costs rise, their willingness to absorb higher prices will gradually diminish. Should iron production decline significantly under mounting loss pressures, market participants should monitor the potential shift in supply-demand dynamics toward the end of November and early December.

As an integrated internet platform providing benchmark prices, on November 10, the benchmark price of coke from SunSirs was 1613.75 RMB/ton, an increase of 2.06% compared with the beginning of the month (1581.25 RMB/ton).

Application of SunSirs Benchmark Pricing：

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