Most active China coking coal contract rises over 6.35% to 1,193 yuan/metric ton

Most active China coking coal contract rises over 6.35% to 1,193 yuan/metric ton

The most active China coking coal contract surged over 6.35% to 1,193 yuan per metric ton on Wednesday, July 2, 2025, hitting its upper limit for a third consecutive session [1]. The price increase comes amid market chatter about potential government inspections at major coal production hubs, which could lead to supply disruptions.

The rally in coking coal prices follows a series of events, including a visit by President Xi Jinping to Shanxi, China's top coal production hub, earlier this month [1]. This visit sparked speculation about a fresh wave of supply reforms. Additionally, a document purported to be from the National Bureau of Energy (NBE) calling for inspections at coal mines in eight provinces has been circulating on social media, further fueling market concerns [1, 2].

Simon Wu, a senior consultant at Wood Mackenzie, stated, "This could potentially reduce the effective supply to the market" [1]. While Reuters could not verify the authenticity of the document, a phone call to a number in the document was answered by someone who claimed to be following instructions from the NBE [1].

Iron ore prices, however, retreated from recent highs despite news of a massive hydropower project in Tibet. The most-traded September iron ore contract on the Dalian Commodity Exchange ended daytime trade 0.61% lower at 812 yuan per metric ton [3].

Coking coal prices have gained 28% so far in July, reflecting the market's anticipation of potential supply disruptions due to government inspections [1]. The continued price rally comes as state media confirmed the veracity of government documents calling for inspections on eight major coal production hubs [3].

Total coking coal imports in H1 2025 reached nearly 53 million tonnes, down by a marked 7.4% compared to the same period last year, according to data from the General Administration of Customs (GACC) [4]. Imports from Mongolia, China's largest coking coal supplier, dropped by a hefty 16% on year, while Australian shipments rose by 26.8% [4].

The most active China coking coal contract on the Dalian Commodity Exchange closed daytime trade 11% higher, hitting the upper limit for a third straight session and also touching its highest since February 21 [3].

References:
[1] Reuters. (2025, July 22). China's coking coal prices hit daily limit again, chatter about government mine inspections. Retrieved from https://www.reuters.com/business/energy/chinas-coking-coal-prices-hit-daily-limit-again-chatter-about-government-mine-2025-07-22/
[2] TradingView. (2025). Reuters. China's coking coal prices hit daily limit again on chatter about government mine inspections. Retrieved from https://www.tradingview.com/news/reuters.com,2025:newsml_L1N3TJ04J:0-china-s-coking-coal-prices-hit-daily-limit-again-on-chatter-about-government-mine-inspections/
[3] Economic Times. (2025). Coking coal hits five-month high on government mine inspections. Retrieved from https://m.economictimes.com/industry/indl-goods/svs/metals-mining/coking-coal-hits-five-month-high-on-government-mine-inspections/articleshow/122856106.cms
[4] BigMint. (2025). China's coking coal imports drop over 7-y-o-y in H1CY25. Retrieved from https://www.bigmint.co/insights/detail/chinas-coking-coal-imports-drop-over-7-y-o-y-in-h1cy25-gacc-665522