- China coking coal supply faces uncertainty amid mine suspensions and tighter safety controls
- Prices turn firmer on low inventories and strong auction demand
China’s coking coal market faced renewed supply uncertainty on August 6, after leading miner Shanxi Coking Coal Energy Group Co., Ltd. announced the suspension of its Xiqu mine following a fatal accident. The incident occurred amid heightened safety supervision in Shanxi’s coal sector, fueling concerns over the stability of domestic coking coal supply.
According to a statement from Shanxi Coking Coal Energy issued on Thursday, operations at its Xiqu mine were suspended after a fatal accident the previous day. The 2.7-million-tonne-per-year mine accounts for 5.67% of the company’s total capacity and is one of its key coking coal operations, the firm noted. Shanxi Coking Coal Energy is a major listed subsidiary of state-run Shanxi Coking Coal Group Co., Ltd, the country’s largest producer of coking coal.
The latest suspension drew particular market attention, as the Xiqu mine had restarted only a week earlier — having been idled on July 23 due to an expired mining licence before resuming on July 30 after the renewal, according to reports.
The accident renewed concerns over domestic coking coal supply, especially as many Shanxi mines remain suspended and authorities continue to tighten safety oversight, market sources said.
According to local media, the Shanxi provincial government recently approved 17 new measures on coal industry development and safety management, following their initial release for public consultation on July 21. This suggests that the regulations may soon be officially introduced.
Tighter supply conditions may further boost positive sentiment in China’s coking coal market this week, especially as many miners are holding prices firm amid low inventories, sources reported.
In North China’s Shanxi, the price of Lvliang’s washed Lishi primary coking coal (A 11%, S 1%, G 80) rose Yuan 60/tonne ($8.9/t) from the prior session to Yuan 1,940/t yesterday, EXW with VAT. Separately, a Changzhi-based miner lifted its raw lean coal (A 30%, S 0.5%, G 20) price by Yuan 38/t to Yuan 1,201/t EXW with VAT, Mysteel learned.
Riding the recent bullish trend, miners in Inner Mongolia’s Qipanjing county and Wuhai city lifted washed fat coal prices by Yuan 90-160/t yesterday, with the low-ash, low-sulfur grade (A 12%, S 0.8%, G 90) reaching Yuan 1,540/t, EXW including the VAT.
Elsewhere in northwest China’s Shaanxi province, six Yan’an-based miners raised washed gas coal prices by Yuan 20-30/t yesterday, pushing them to a range of Yuan 920-1,100/t, VAT inclusive, on either a free-on-rail or EXW basis, according to Mysteel.
On Thursday, Mysteel Coking Coal Index (MCCI), which tracks coking coal prices nationwide in China, stood at Yuan 1,715.3/t including the 13% VAT, up Yuan 8.2/t from Wednesday.
In yesterday’s online coking coal auctions, all the listed 55,000-tonne cargoes were sold out, marking the second 100% clearance rate after Tuesday, according to Mysteel’s tracking.
Note: This article has been published in accordance with a content exchange agreement between Mysteel Global and BigMint.
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