Coke Coaling Futures Prices Reach New Highs with Almost No New Capacity Released

The most-traded JM 2305 coking coal contract has surged by over 30% since November last year, with prices hitting new highs since June last year. Overseas, the recent prices of coking coal from Australia's Peak Downs mine continued to rise sharply, up by $14/mt week-on-week to $396/mt. Some market players pointed out that almost no coking coal capacity has been released, which still resulted in its tight supply.

The imported coking coal prices this week outnumbered the domestic prices by over 800 yuan and thus had no price advantage. On the demand side, the policy of stabilizing economic growth enhanced the expectations for economic recovery. The rebar prices have risen for several weeks, and the average operating rate of national steel mills also climbed.

The coking companies and steel mills are likely to restock on falling inventories and may boost the coal coking prices this. Considering that the overall coking coal inventory is at a historical low while still declining when overseas prices remain high, the domestic coking coal prices are expected to rebound.