DCE Coking Coal Rally Explained: From Demand Pessimism to Supply-Side Speculation
- Met Coal Junkie
- 1 day ago
- 1 min read
DCE JM 09 up 7.19% to RMB 768 as of 3PM GMT +8.
The coking coal market is currently driven by multiple speculative headlines, including:
June's nationwide mine safety inspection campaign, increasing regulatory pressure;
Mongolia's transport authority cracking down on overloading, leading to the suspension of road transport at the Erenhot border crossing;
China’s revised Coal Law taking effect on July 1, which is expected to trigger consolidation among poorly managed small mines, raising procurement costs.
These developments have fueled expectations of supply tightening.
On the futures market, short positions on the JM2507 contract started to unwind as of yesterday. The market had previously priced in a demand slowdown, which saw the JM2509 contract bottom out around RMB 729.
Currently, the market is shifting focus toward trading the expectation of supply cuts. Spot prices have yet to catch up, and although fundamentals remain weak, the trading narrative has clearly pivoted from demand concerns to potential supply disruptions.
Join the new run of Junkie Index here: https://www.metcoaljunkie.com/post/join-now-week-23-junkie-met-coal-sentiment-index