Chinese coking coal prices showed volatility on Friday but remained on track for their strongest weekly performance in six weeks, as supply disruptions and seasonal demand expectations outweighed short-term price fluctuations.
Market sentiment was shaped by Beijing’s renewed push to stabilize energy supply ahead of peak summer demand, alongside ongoing production disruptions following a deadly mining accident.
Beijing Moves to Stabilize Energy Supply
China’s state planner emphasized the need to secure production and supply of key energy resources, including coal and natural gas, to ensure sufficient power generation during the upcoming peak demand season, according to a statement published on WeChat.
The guidance comes as authorities attempt to balance energy security concerns with safety-driven production halts in major coal-producing regions.
Mine Accident Triggers Supply Tightening
Coal supply concerns intensified after a gas explosion at the Liushenyu mine in Shanxi province killed 82 people last Friday.
The incident triggered stricter safety inspections and temporary production suspensions across several mines in the coal-rich region, tightening near-term supply conditions.
Analysts say the disruption has added upward pressure on prices even as policymakers work to stabilize output.
As noted by shipping and commodities analyst Kpler, “Coal markets tightened following China’s mine safety clampdown after a gas explosion, supporting prices ahead of peak summer demand.”
Coking Coal and Coke Prices Hold Weekly Gains
The most-traded coking coal contract on the Dalian Commodity Exchange edged down 0.31% to 1,285.5 yuan per metric ton on Friday, but still posted a weekly gain of 9.6%.
Similarly, the active coke contract rose 0.26% to 1,903 yuan per ton, marking a 9.4% weekly increase.
The gains reflect a broader trend of tightening supply conditions despite intraday volatility.
Steel Sector Demand Adds Support
Prices of steelmaking feedstocks also found support from steady demand in the industrial sector.
According to consultancy Mysteel, average daily hot metal output—a key indicator of steel production activity—rose 0.1% week-on-week to 2.41 million tons, reaching its highest level since October.
This resilience in steel output has helped underpin demand for coking coal and related inputs.
Iron Ore and Steel Prices Mixed
Iron ore prices remained relatively stable:
- Dalian iron ore futures rose 0.45% to 783.5 yuan per ton
- Singapore benchmark iron ore futures edged up 0.11% to $105.45 per ton
Steel futures in Shanghai mostly strengthened:
- Rebar rose 0.19%
- Hot-rolled coil gained 0.33%
- Wire rod increased 0.24%
- Stainless steel slipped 0.44%
Outlook
While short-term volatility remains, China’s coking coal market is being supported by a combination of supply-side disruptions and steady industrial demand.
With peak summer power demand approaching, traders expect continued price sensitivity to both policy signals and mining output conditions in the coming weeks.
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