Recap: Chinese met coal and coke market 3 Jan. Click to read

Coking coal demand remains weak due to declining pig iron output and cautious procurement, while supply is ample as production normalizes post-year-end. Prices are subdued, with steady or declining indices. Limited restocking ahead of Lunar New Year offers slight support, but market sentiment stays bearish amid oversupply and soft downstream activity.

Demand

The demand for coking coal remains subdued due to declining pig iron production and cautious downstream procurement. Steelmakers and coking plants are operating under weak seasonal demand, with many maintaining only essential restocking activity. In regions like Shandong, major coal consumers exhibit low purchasing interest, reflecting weak sentiment. Imported coal demand also remains minimal, with Mongolian coal seeing limited transactions despite increased border crossings. Russian coal faces similar challenges, as terminal buyers show little interest due to overall market softness.

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Supply

The supply of coking coal has increased as production regions resume operations following the completion of annual production targets. This has led to a relatively loose supply-demand balance. In Shanxi’s Luliang region, previously halted coal mines are now operating at normal levels, and auction markets indicate a supply surplus. Similarly, Shandong’s coal mines are dealing with high inventory levels, creating additional supply pressure. Imported coal supply has also remained stable, with border crossings in Mongolia increasing to an average of 566 trucks per day.

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Price

Coking coal prices remain under pressure, with most indices holding steady or declining. As of January 3:

Shanxi low-sulfur coal: 1407 yuan/ton

Shanxi medium-sulfur coal: 1260 yuan/ton

Shanxi high-sulfur coal: 1233 yuan/ton

Auction markets are seeing reduced starting and final prices, indicating a bearish outlook. For example, high-sulfur lean coal in Shanxi’s Luliang region saw a drop in auction prices compared to December. Imported coal prices have also softened:

Mongolian coal: Long-term prices fell by 20 yuan/ton week-over-week.

Russian coal: Northern port prices dropped by 40–70 yuan/ton for low-ash grades.

Short-term price stabilization may occur due to limited restocking ahead of the Lunar New Year, but the broader sentiment remains bearish.