Shanxi coking coal supply remains constrained by safety inspections, with limited downside for prices

Overview

This report is a weekly update on China’s coal industry, focusing on tracking domestic pithead, port, and seaborne prices for thermal coal and coking coal, and assessing the impact of Shanxi coal mine safety inspections and production resumption progress on coking coal supply. The report shows that thermal coal prices were broadly stable week over week, while coking coal prices showed slight divergence; despite some mines gradually resuming production, overall coking coal supply remains constrained.

Core views

First, thermal coal prices continue to show resilience, with major domestic price indicators flat or slightly up week over week. Second, domestic and Australian coking coal prices posted modest declines, but the magnitude was limited. Third, Shanxi safety inspections continue to affect coking coal production, with the number of suspended mines and the capacity involved remaining elevated, and utilization at mines that have resumed production staying low. Fourth, tight supply remains the main support for coking coal prices and can limit short-term downside.

Analysis framework

The report uses a week-over-week high-frequency tracking approach to compare domestic port prices, pithead prices, and seaborne coal prices, while incorporating the number of suspended mines in Shanxi, the capacity involved, and utilization at resumed mines to assess supply changes and price impact.

Methodology notes

• Industry high-frequency trackingWeek-over-week coal price monitoring

  Compare weekly price changes across different coal types and market segments

  By using indicators such as QHD5500, BSPI, CCI5500, Shanxi pithead prices, NEWC, and QLD, the report observes the resilience and divergence of thermal coal and coking coal prices.

• Supply analysisAnalysis of suspended capacity and utilization after production resumption

  Assess effective supply using the number of suspended mines, annual capacity involved, and operating status after resumption

  The report examines not only nominal production resumption progress, but also the issue of low utilization at mines that have resumed production; therefore, it concludes that effective coking coal supply remains constrained.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Coking coal

  Directly benefits from Shanxi supply constraints

  Strengths

  Safety inspections have caused a large number of mines to suspend production, utilization at mines that have resumed production is low, and short-term effective supply is constrained.

  Weaknesses

  Both domestic and QLD coking coal prices declined slightly this week, and price momentum is not yet consistent.

  Comparison

  Compared with thermal coal, coking coal prices are more volatile, but supply-side support is stronger.

  Risks

  If coal mine production resumption and capacity utilization recover faster than expected, price support may weaken.

• Thermal coal

  Stable price performance

  Strengths

  QHD5500, BSPI, and Shanxi Datong pithead prices were flat week over week, while CCI5500 rose slightly.

  Weaknesses

  Seaborne NEWC prices were basically flat and have not yet shown clear upward momentum.

  Comparison

  Compared with coking coal, thermal coal weekly price volatility is smaller and resilience is more stable.

  Risks

  If supply increases or demand weakens later, current stable prices may come under pressure.

• China coal equity coverage portfolio

  Coal price resilience and supply constraints provide fundamental support

  Strengths

  Some H-shares and coal companies have Overweight ratings, and stable coal prices help support earnings expectations.

  Weaknesses

  The industry report did not provide a unified target price or a clear sector rating adjustment.

  Comparison

  The coverage table includes both Overweight (O) and Equal-weight (E) ratings, indicating differences in stock-specific views.

  Risks

  Falling coal prices, faster production resumption, and company-level operating differences may lead to share price divergence.

Key data

• QHD5500 thermal coal priceRMB725/tonneAs of 2026-07-31, flat week over week.
• BSPI priceRMB715/tonneFlat week over week.
• CCI5500 priceRMB828/tonneUp 0.1% week over week.
• Shanxi Datong 5800 pithead priceRMB711/tonneFlat week over week.
• Liulin No. 4 coking coal pithead priceRMB845/tonneDown 0.6% week over week.
• QLD coking coal priceUS$227/tonneDown 1.3% week over week.
• Suspended coking coal mines in Shanxi57 minesDistributed across five cities: Changzhi, Taiyuan, Jinzhong, Lüliang, and Linfen.
• Annual capacity involved in suspensions60.4 million tonnesDown 16.7% from the previous week, but utilization at mines that have resumed production remains low.

Impact & implications

In the short term, effective coking coal supply in Shanxi is recovering more slowly than nominal production resumption progress, which helps maintain bottom support for coking coal prices and may improve price expectations for coking coal producers. Stable thermal coal prices also provide some support for coal industry earnings and market sentiment. However, coking coal spot prices have already edged lower, indicating that price performance still depends on the pace of production resumption and subsequent supply-demand changes.

Risks

• Production resumption and utilization recovery at suspended coal mines in Shanxi may be faster than expected, causing coking coal supply pressure to ease quickly.
• Coking coal spot prices may continue to decline, weakening the support from tight supply for industry earnings.
• Thermal coal demand may weaken or new supply may be released, making current price resilience difficult to sustain.
• The report does not provide complete demand, inventory, and import data; the supply-demand judgment is mainly based on price and supply-side high-frequency information.
• Morgan Stanley disclosed that it has shareholding, market-making, or investment banking relationships with some covered companies; investors should use this report as only one factor in their decision-making.

What to watch

• The number of the 57 suspended coking coal mines in Shanxi that resume production and their actual capacity utilization.
• Whether annual capacity involved in suspensions continues to decline from 60.4 million tonnes.
• Whether the Liulin No. 4 coking coal pithead price and domestic coking coal prices can stop falling.
• Subsequent changes in QLD and NEWC seaborne coal prices.
• Whether thermal coal indicators such as QHD5500, BSPI, and CCI5500 can remain stable.
• The duration of safety inspection policies and their impact on output in Changzhi, Taiyuan, Jinzhong, Lüliang, and Linfen.