Most active China coking coal contract falls 12% to 1,050 yuan/metric ton, the lowest since July 22

Most active China coking coal contract falls 12% to 1,050 yuan/metric ton, the lowest since July 22

BEIJING — The most active China coking coal contract on the Dalian Commodity Exchange (DCE) experienced a significant decline, falling by 12% to 1,050 yuan per metric ton on Monday, July 28, 2025. This marks the lowest level since July 22, when prices hit their daily limit [1].

The price drop is attributed to investors closing their long positions to cash in on profits following a dramatic price rally. The rally was driven by expectations of a supply reduction after the National Energy Administration ordered inspections at mines in major coal production hubs to check for excess production [2]. The Dalian exchange's announcement to limit positions triggered the price slump, as traders liquidated their holdings to avoid risks [3].

The most-traded coking coal contract, DJMcv1, closed at 1,100.5 yuan per metric ton on Monday, down from 1,250 yuan per metric ton on Friday, July 25. The contract had gained 33% over the past week, touching its daily upper limit for five consecutive trading sessions [1].

The retreat in coking coal prices also impacted other commodities. Iron ore prices softened on Monday, with the most-traded September iron ore contract, DCIOcv1, ending the day 1.75% lower at 786 yuan per ton. The benchmark September iron ore on the Singapore Exchange slipped 2.31% to $100.9 a ton [2].

Steel benchmarks on the Shanghai Futures Exchange also lost ground. Rebar (SRBcv1) shed 2.05%, hot-rolled coil (SHHCcv1) lost 2.3%, wire rod (SWRcv1) slipped 2.92%, and stainless steel (SHSScv1) dipped 0.73% [3].

Analysts at Galaxy Futures attributed the retreat to the receding speculative sentiment and the imposition of trading limits by the Dalian exchange. The market had bet on Beijing's seriousness in addressing overcapacity in several sectors, leading to a surge in prices [2].

The episode underscores the volatility in global commodity markets and the significant influence of Chinese regulatory decisions on international prices. Investors are now closely watching the upcoming high-level Politburo meeting and fresh trade talks between China and the United States for further policy clarity [4].

References:
[1] https://www.miningweekly.com/article/coking-coal-retreats-on-profit-taking-activities-2025-07-28
[2] https://finimize.com/content/coking-coals-rally-stalls-as-china-tightens-trading-rules
[3] https://www.brecorder.com/news/40375007/coking-coal-retreats-on-profit-taking-activities
[4] https://www.reuters.com/business/energy/chinas-coking-coal-prices-hit-daily-limit-again-chatter-about-government-mine-2025-07-22/