Weekly Coal Update: Safety Inspections in Shanxi Continue to Curb Coking Coal Supply
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Morgan Stanley's weekly coal update highlights a divergence between thermal and coking coal price trends. As of July 3, thermal coal prices experienced minor weekly declines. The BSPI index fell 0.3% to RMB 712/ton, and the CCI 5500 index dropped 0.6% to RMB 851/ton, while the QHD 5500 kcal price slightly increased by 0.1% to RMB 727/ton. Domestically, the Shanxi Datong 5800 kcal pit-head price decreased by 3.4% to RMB 700/ton. Internationally, the NEWC thermal coal price rose 0.8% to $130/ton.
Conversely, coking coal prices demonstrated resilience. The Liulin #4 pit-head price remained stable at RMB 865/ton, and the FOR price held at RMB 2,040/ton. International Queensland coking coal edged up 0.4% to $242/ton.
This price stability in coking coal is directly attributed to ongoing safety inspections in Shanxi province, which continue to restrict supply. The report notes that frequent production halts and restarts have kept capacity utilization rates at most mines between 30% and 70%.
As of July 3, a total of 54 coking coal mines across five major cities in Shanxi—including Changzhi, Taiyuan, Jinzhong, Luliang, and Linfen—remained suspended, representing 72.15 million tons per year of capacity. While this marks an improvement of 65 fewer suspended mines compared to May 25, regional supply remains constrained. Morgan Stanley maintains a cautious rating on the broader coal sector.
Key exhibits
Exhibit 1
