Commodities Compendium

Research evidence excerpt

Commodities Compendium

Coking Coal

Supply side rattles, again

The most significant catalyst for both onshore and seaborne coking coal prices was the

Liushenyu mine accident on 22 May, which triggered a sharp rally in domestic coal prices

that spilled over into seaborne markets. The key focus heading into 2H will be the duration

and scope of safety inspections, which will determine the extent of the constraint on

domestic production.

Domestic washed coking coal production is currently estimated to be down approximately

9% YoY in mid-Jun. Daily mine reopening data from tracking providers suggests this figure

has been improving, but actual production has not recovered and remains persistently low.

We expect output to remain at these depressed levels for several more weeks before any

meaningful improvement, with full 2H volumes staying below prior-year levels. We have

accordingly assumed full-year output to be down approximately 3% YoY. What distinguishes

this episode from prior post-accident safety inspections is the broader scope of scrutiny

involved. Previously, the focus was largely confined to physical inspections, but this time

workforce safety training, workforce composition, specifically the use of contract versus

casual workers, and overproduction practices have all come under review. This broader

regulatory focus supports our view that the production impact will be more sustained.

Figure 214 - Seaborne prices rose on spillover Figure 215 - Domestic physical coking coal prices

impact from higher onshore prices have been resilient

Source: SxCoal, Macquarie Strategy Jun'26

Source: Platts, Macquarie Strategy Jun'26

Figure 216 - As of mid-June, domestic washed Figure 217 - Mongolian volumes have surged again