1. Market Overview
In July 2026, China’s coking coal and coke market presents a typical game pattern with cost-side support and weakening downstream demand. Driven by tight coal supply in the first half of the year, coke prices have secured nine consecutive rounds of increases, while the tenth round of price hikes faces substantial resistance. As of early July, spot coking coal prices have remained high year-on-year, but futures prices have weakened from elevated levels. The market has shifted from a unilateral rising trend to wide-range consolidation with intensified bull-bear divergence. In the short term, tight supply provides solid bottom support for prices, whereas sluggish end-user demand and deteriorating steel mill profitability strongly cap upward momentum, leaving dual coke prices fluctuating under mild pressure.
2. Core Bullish Supporting Factors
2.1 Tight Raw Coal Supply Consolidates Cost Support
Stringent safety inspections and production controls continue in Shanxi, China’s major coal-producing region. The resumption and expansion of coal mine production have been consistently slower than market expectations, failing to fundamentally ease the tight supply of coking coal. Official data shows China’s coking coal output dropped 7.75% year-on-year in May. Low coal mine inventory and limited room for high-grade coking coal price corrections underpin stable coking coal costs, effectively preventing sharp declines in dual coke prices.
2.2 Rigid Downstream Demand Remains Resilient
Although steel mills have arranged routine maintenance with a slight drop in molten iron output, overall production capacity remains at a relatively high level for the year, with no large-scale concentrated production cuts. Rigid procurement demand for coking coal and coke has not collapsed, effectively offsetting part of the downstream negative pressure and avoiding a unilateral market slump.
3. Core Bearish Restricting Factors
3.1 Deteriorating Steel Mill Profitability Weakens Procurement Willingness
Sustained weakness in the steel market has squeezed steel mills’ profit margins amid high production costs. Currently, the profit rate of 247 sampled steel mills has fallen to 42.86%, with nearly half of the mills operating at a loss. Pressured by shrinking profits, steel mills have increased blast furnace maintenance and reduced operating loads, significantly lowering their enthusiasm for coke procurement and slowing raw material restocking. The tenth round of coke price hikes is highly unlikely to be implemented, leaving limited upward momentum for dual coke prices.
3.2 Weakening Coking Coal Spot Prices Drives Pessimistic Sentiment
Affected by sluggish downstream demand, high-priced primary coking coal resources have started to correct moderately. Trading activities have slowed and inventory pressure has increased, forming a weak spot market trend. The downward spot trend has gradually spread to the futures market, reversing the previous unilateral rally and putting prices under obvious pressure at high levels.
3.3 Off-Season Sluggish End Demand Restricts Raw Material Prices
July marks the traditional off-season for steel consumption, with weak demand from infrastructure and manufacturing sectors. Finished steel prices struggle to rise with poor market transactions. Failed cost transmission in the downstream steel sector has formed a reverse suppression on upstream coking coal and coke prices, creating a negative industrial chain logic: weak end demand → sluggish steel prices → pressured raw material prices, which is the key mid-to-long-term drag on dual coke prices.
4. Future Price Trend Forecast
Based on the current supply-demand fundamentals, industrial chain transmission and market sentiment, dual coke prices will maintain a weak wide-range volatile pattern in mid-to-late July, showing a clear market feature of “solid bottom and firm ceiling”.
1. Solid downside support: Strict mine safety supervision and tight coking coal supply are unlikely to improve in the short term. The robust cost foundation will continue to underpin prices, making sharp declines nearly impossible.
2. Limited upside potential: The superposition of steel mill losses, rising blast furnace maintenance and off-season demand weakness has exhausted price upward momentum, ruling out new price highs and further coke price hikes.
3. Medium-term outlook: The subsequent market trend will mainly depend on the recovery of end steel demand and the easing of coal supply. Dual coke prices are expected to stabilize and rebound once the steel off-season ends, demand recovers and steel mills launch centralized restocking. If end demand remains depressed, prices will continue to fluctuate downward.
5. Trading & Operation Suggestions
1. Adopt a cautious wait-and-see strategy in the short term, avoid blind bullish bets, lock prices rationally for high-level orders to hedge downside risks.
2. Avoid excessive bearish expectations supported by solid cost fundamentals, and arrange moderate restocking for rigid demand at low price levels.
3. Closely track three core indicators to capture market turning points: coal mine production resumption progress in Shanxi, steel mill blast furnace operating rate, and end steel market transaction volume.