The global coking coal market will likely be volatile in the short-term as a decline in steel production and two rounds of the commodity’s price cuts will be offset by strict safety inspections of mines by China, analysts said. This is despite futures rising by 18 per cent in a week.
“In the short term, coking coal lacks a clear directional trend and is expected to remain range-bound with wide fluctuations,” said China commodity data group Sunsirs.
An explosion in Liushenyu coal mine in China’s Shanxi province in late May killed 82 people and triggered a State Council investigation into mine safety and regulatory compliance. Shanxi is central to China’s coking coal supply.
Research agency BMI, a unit of Fitch Solutions, said China has implemented the new Chinese Standards for Determining Major Accident Hazards in Coal Mines from July 1.
“In our view, this will make it harder for Chinese coking coal mines to lift output aggressively in response to higher prices, keeping domestic supply tighter than it would otherwise be. Major Chinese producers are also likely to shift towards more conservative operating practices following the Liushenyu accident… As a result, even where mines have formally resumed operations, actual output is likely to remain below nameplate capacity in some areas,” it said.
This will keep Chinese coke plants active in the seaborne market through Q3, said the research agency.
Rasing its price forecast for 2026 by $15 a tonne, BMI said the upward revision reflected the residual impact of the Liushenyu coal mine explosion.
“We are lifting our 2026 price forecast for Australian premium hard coking coal to $225/tonne… Prices averaged $227 in Q1 and $238 in Q2, lifting the H1 average to $233,” it said.
BMI expects prices to ease slightly in Q3, averaging $220, before easing again to $215/tonne in Q4.
On Tuesday, coking coal on the Dalian Commodity Exchange in China was quoted at 1,628.5 Chinese yuan ($242.26) a tonne for September contracts. Spot prices were over 2,150 yuan ($319).
Australia’s Office of the Chief Economist (AOCE) said coking coal prices are expected to be supported by continuous demand growth from India.
Australian premium hard coking coal spot prices surged in early 2026 as disruptions to production from wet weather and Cyclone Koji coincided with elevated demand from India.
“Prices peaked at around$250 per tonne in early February, before easing to around $220 by the end of the March quarter. Prices firmed through April and held around $240 per tonne in May, supported by elevated diesel costs,” it said.
Sunsirs said in Shanxi, routine safety oversight remains strict, and 57 mines across the cities of Lüliang, Linfen, Changzhi, Taiyuan, and Jinzhong remain shut. This has affected a combined capacity of 72.5 million tonnes.
“High-pressure safety regulation persists; even for mines that have resumed operations, extraction intensity is tightly controlled, making it difficult for capacity utilisation rates to return to previous levels. There is limited room for an overall rebound in domestic coking coal production,” it said.
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