Key facts
- Coking coal futures on China's Dalian exchange are set for a record 46% surge in August.
- Persistent supply issues, including a mining disaster and safety checks, are driving the price increase.
- This marks the largest monthly jump since coking coal futures began trading in 2013.
- Indian steelmakers are facing margin pressure due to higher input costs.
- Australian premium coking coal prices have risen 25% year-to-date.
- Supply disruptions cited include mine ramp-ups, the Iran war, Australian production issues, and a fatal mine explosion in China.
Coking coal prices on China's Dalian exchange are poised for a record-breaking 46% surge in August, driven by ongoing supply constraints. This marks the largest monthly increase since the futures contract began trading in 2013, surpassing the previous record of 38% in July 2025.
The persistent supply issues stem from a mining disaster in May and subsequent increased safety checks on Chinese mines. These factors, combined with other disruptions, have tightened the market for the key steelmaking raw material.
The price rally is extending beyond China, impacting steelmakers in India, the world's second-largest steel producer. India, which imports up to 95% of its coking coal, is experiencing squeezed margins due to the rising input costs.
Premium coking coal prices on a free-on-board basis in Australia have already seen a 25% increase in the first seven months of the year compared to the previous year. Mining giant BHP noted that strong Indian import demand and supply disruptions have tightened the seaborne market.