According to Futures Daily, coking coal futures prices surged rapidly following safety accidents at coal mines in Shanxi; the main contract peaked at 1,486.5 RMB/ton—a cumulative rise of nearly 29%—before retreating from that high and surrendering most of the earlier gains. Throughout this market cycle, spot prices have remained resilient, with most coal varieties seeing only minor pullbacks ranging from 0 to 50 RMB/ton.

The recent pullback in coking coal futures prices has been driven by two main factors. On one hand, expectations of overseas interest rate hikes have intensified, causing a collective decline in commodity prices since mid-May; the downward trend has accelerated recently, dragged down by weakness in energy and chemical products. Market sentiment is bearish, placing pressure on the ferrous metals sector. On the other hand, structural imbalances within the ferrous industry—particularly in the steel sector—have accumulated during the off-season. Steel inventories continue to rise while profit margins are squeezed; as steel mills increase maintenance shutdowns and face expectations of production cuts, demand for related raw materials has come under pressure, further pushing down coking coal futures prices.

However, the recovery of coking coal supplies has been sluggish, and the tight supply situation persists. Currently, the supply landscape is characterized by a significant contraction in domestic output offset by high levels of imports. Following the accidents in Shanxi, coal mines drastically reduced production; in late May, a total of 165 mines in the province halted operations, representing a combined capacity of 218.7 million tons. Although mines have gradually resumed operations following safety inspections, the pace remains slow due to stricter safety oversight, which continues to constrain production. The latest survey indicates that, as of July 1, 95 mines had resumed production, accounting for a total capacity of 125 million tons. High-frequency data also confirms the slow pace of resumption. For the week ending July 3, the capacity utilization rate among sample of 523 coking coal mines stood at 66.96%, with an average daily raw coal output of 1.504 million tons. These figures represent week-on-week declines of 1.21 percentage points and 27,200 tons, respectively—hitting new lows for the period and falling 26.62 percentage points and 587,200 tons below the peaks recorded prior to the accidents. It is evident that coking coal mines in Shanxi have yet to show signs of accelerating production resumption. Furthermore, production at active mines remains constrained; to ensure safety, privately-owned mines have widely adopted measures such as reducing personnel and cutting shifts, resulting in a slow recovery of coking coal output.

Regarding imports, Mongolian coal currently dominates the market, supplemented structurally by seaborne coal arriving at ports. In June, customs clearance volumes for Mongolian coal remained high; the Ganqimaodu border crossing recorded a daily average of 1,332 trucks and a throughput of 179,000 tons. However, port inventories consist largely of weathered coal, thermal coal, and small amounts of anthracite, with limited supplies of high-quality prime coking coal. Additionally, when used alone in coke ovens, Mongolian coal falls short of Shanxi coking coal in terms of coking properties and strength; while it helps bridge the domestic supply gap for low-sulfur prime coking coal, supplementary seaborne coal—particularly from Australia—remains necessary. Earlier, a rapid rise in domestic coal prices briefly opened the import window for Australian coal, leading to increased shipments to China, though the overall volume remained modest. Currently, the import window has closed, limiting the impact of Australian coal on the domestic market.

At present, low supply levels provide price support, yet concerns regarding demand limit the potential for further price increases. Demand for coking coal currently demonstrates reasonable resilience. With the implementation of the ninth round of coke price hikes, independent coking plants have seen improved profitability and stabilized production; as of the week ending July 3, the combined average daily coke output from independent coking plants and steel mills (tracked by Mysteel) stood at 1.1163 million tons—a slight week-on-week decline but still a high for the year—while the average daily hot metal output from 247 steel mills reached 2.4325 million tonnes, a new annual high. However, it is worth noting that high coal prices have begun to dampen downstream purchasing enthusiasm; independent coking plants and steel mills have shifted from panic-driven restocking to purchasing based on immediate needs, and buying interest among intermediaries has weakened, evidenced by a marked rise in failed auctions on online platforms. Meanwhile, end-user demand remains sluggish during the off-season, and steel mill profitability has narrowed—the proportion of profitable mills among the 247 surveyed by Mysteel has dropped to 42.86%, a low for the year. With an increase in production cuts and maintenance activities, expectations point toward a weakening in coking coal demand. Overall, coking coal futures have recently retreated from their highs due to weakening sentiment in the commodities market; however, spot prices remain firm as the resumption of production in key regions lags and the low-supply landscape persists. While the supply-demand balance remains relatively favorable, high prices are beginning to dampen downstream purchasing enthusiasm, though coking coal prices are expected to maintain a firm trend going forward.

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