Reasons For The Increase in Coking Coal Prices

 The recent surge in coking coal prices is driven by three key factors: tight coking coal supply, constrained coking capacity, and robust downstream demand.

 First, coking coal supply remains tight, providing strong cost support. In May, 137 coal mines in Shanxi were shut down, with subsequent resumption of production falling far short of expectations. Meanwhile, major global exporters of coking coal have also reduced their output, pushing coking coal prices sharply higher-low-sulfur coking coal from Linfen, Shanxi, has risen by RMB 380–400 per ton, outpacing the increase in coke prices and directly boosting production costs.

 Second, coking capacity itself is constrained, exacerbating the supply-demand imbalance. As of June 5, although 61 coal mines in Shanxi had resumed operations, overall output from these reopened mines remained broadly lower. By June 12, four mines in Gujiao alone had suspended production, totaling 6 million tons of capacity, while operating mines also saw a noticeable decline in output. Daily coking coal production fell by approximately 288,000 tons, corresponding to a reduction of roughly 205,000–221,000 tons in daily coke output.

 Third, strong downstream demand is being unleashed, reinforcing a "weak supply, strong demand" dynamic. As of mid-June, blast furnace utilization rates at steel mills remained at historically high levels. On June 12, the blast furnace operating rate across 247 steel plants nationwide stood at 84.27%, hitting a new year-to-date high and the highest level in nearly five years. Average daily hot metal output reached 2.4093 million tons, up slightly by 0.12% month-on-month, and staying above 2.4 million tons for several consecutive weeks. This fundamental imbalance-weak supply coupled with strong demand-has become a powerful driver behind the sustained rise in coking coal prices.