On July 22, 2025, China’s coking coal futures surged to their daily trading limit for the second consecutive session, driven by market speculation about potential government inspections at coal mines. The most active contract on the Dalian Commodity Exchange rose nearly 8% to 1,048.5 yuan ($146.19) per metric ton, the highest level since March 19. This rally was fueled by rumors of a National Energy Administration (NEA) directive ordering inspections in eight provinces to assess whether production exceeded licensed capacities. While the authenticity of the circulated document remains unverified, the speculation alone was sufficient to drive market concerns about potential supply disruptions.
The surge in coking coal prices is part of a broader trend in China’s commodity markets, with prices for steel, polysilicon, alumina, and lithium carbonate also experiencing significant increases in July. This uptick follows a July 1 policy announcement by Chinese authorities emphasizing the need to curb “disorderly price competition” and address industrial overcapacity. Subsequent actions, including sector inspections and temporary shutdowns of non-compliant operations, have reinforced investor optimism. Analysts caution, however, that while the current policy signals are encouraging, meaningful reform may be gradual due to structural challenges, and it could take one to two years before these reforms significantly impact company profits. More