SunSirs: Coking Coal: Loose Supply-Demand Balance Coupled with Weakening Sentiment—Spot Market Runs Steady-to-Weak

The domestic spot market for coking coal generally exhibits a trend of slight declines amidst overall stability, regional divergence, and slowing transaction volumes. Quotes from mines in major production regions mostly remain steady, though prices for certain low-sulfur coal varieties have seen slight downward adjustments. Market participants have adopted an increasingly wait-and-see attitude; downstream purchasing is driven primarily by immediate necessities, and the willingness to accept high-priced deliveries has noticeably diminished, causing the spot market's price center to drift slightly lower.

I. Spot Market Performance (May 21–22)

Current spot quotes for coking coal are predominantly stable with localized softening, reflecting an overall weak consolidation trend:

Low-sulfur primary coking coal in Lvliang, Shanxi: 1,480–1,520 RMB/ton (down 20–40 RMB/ton over the week);

Low-sulfur coking coal in Anze, Linfen: 1,600 RMB/ton (down 20 RMB/ton);

Coal prices in Shandong, Shaanxi, and Heilongjiang remain temporarily stable;

At the Ganqimaodu Port in Inner Mongolia, Mongolian #5 raw coal is priced at 1,100–1,110 RMB/ton, while washed coal stands at 1,234 RMB/ton, showing high-level volatility with a downward bias.

The market transaction rate has retreated, and downstream resistance to high prices has intensified, resulting in a generally subdued trading atmosphere.

II. Domestic Supply and Operating Rates

Supply in major domestic production regions remains stable, with operating rates holding at high levels:

The operating rate for key coal mines stands at 93.12%, while the capacity utilization rate for coal washing plants is 39.27%, ensuring an ample overall output;

Major production regions—including Shanxi, Shaanxi, and Inner Mongolia—are shipping coal normally; only a few mines have experienced temporary production suspensions or restrictions due to safety inspections, leaving the overall supply situation relatively loose. III. Import Overview (April Customs Data)

In April 2026, coking coal imports remained at a high level, recording a significant year-on-year increase:

April import volume: 11.30 million tons (+27.1% YoY; -9.0% MoM);

Cumulative imports (Jan–Apr): 43.551 million tons (+19.9% ​​YoY);

Imports from Mongolia: 7.7115 million tons (accounting for over 68% of total imports; +59.44% YoY);

Imports from Russia: 2.6834 million tons (+6.27% YoY).

A continuous influx of imported resources arriving at ports has further exacerbated the prevailing loose supply landscape within the domestic market.

IV. Current Inventory Status

Inventories across the entire supply chain continued to accumulate, with pressure gradually becoming apparent:

Total coking coal inventory (full sample): 41.252 million tons (+574,000 tons WoW);

Coking plant inventory: 10.763 million tons (+116,000 tons MoM);

Steel mill inventory: 7.888 million tons (+19,000 tons MoM);

Inventory at 16 coastal ports: 6.868 million tons (+362,000 tons MoM);

Inventory at border crossings: 5.156 million tons (+91,000 tons MoM).

The broad-based rise in inventory levels has exerted significant downward pressure on spot market prices.

V. Key Factors Influencing Prices

Continued Loose Supply

High operating rates at domestic coal mines, coupled with massive arrivals of imported coal at ports, have resulted in a dual surge in supply, ensuring an ample availability of market resources.

Marginal Weakening of Downstream Demand

Although hot metal production remains at high levels, shrinking profit margins for steel mills have led to a more cautious approach toward coking coal procurement; meanwhile, operating rates at coking plants have dipped slightly—while essential demand remains stable, there has been no concentrated restocking activity.

Shifting Market Sentiment and Procurement Strategies

The restocking fervor—initially driven by earlier price hikes—has subsided; downstream players have pivoted toward "buy-on-demand" strategies and lean inventory management, effectively eliminating any market willingness to chase rising prices.

Weakening Cost Support and Auction Results

Online auction prices for Mongolian coal at border crossings have retreated; this erosion of cost-side support has further dampened sentiment within the spot market. VI. Upstream, Downstream, and Sales Overview

Upstream: Supplies of raw and washed coal remain ample; coal mines are shipping smoothly, though prices are under pressure.

Downstream: The coke market is currently stable; steel mills are exercising moderate purchasing activity, and overall sales remain subdued, with transactions limited primarily to meeting immediate, essential demand.

VII. Future Market Outlook

Three key factors—ample supply, accumulating inventories, and cautious downstream purchasing—continue to exert downward pressure on prices. However, given the persistent cost support at the coal mine level, the potential for a sharp decline remains limited. Going forward, key areas of focus will include the pace of inventory replenishment by steel mills, customs clearance volumes at ports, and changes in inventory levels.

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