Shanxi Coking Coal Production Halts Persist, While Weekly Materials Prices and Inventories Diverge
AI summary card
Shanxi Coking Coal Production Halts Persist, While Weekly Materials Prices and Inventories Diverge
As of August 20, 54 coking coal mines in Shanxi remained shut down, representing total capacity of 58.7mntpa. Meanwhile, copper mine suspensions, progress toward restarting a lithium mine, and the development of Indonesia’s pricing mechanism were the principal supply events, while prices and inventories diverged across materials.
- As of August 20, 54 coking coal mines in Shanxi remained shut down, with combined capacity of 58.7mntpa.
- Codelco will suspend the Chuquicamata and Ministro Hales copper mines, with respective capacity or targeted capacity of 320ktpa and 200ktpa.
- Vale plans to add approximately 30ktpa of copper production at the Salobo mine, partially offsetting supply disruptions at other copper mines.
- Shanghai copper prices fell 0.2% WoW, but inventories surged 28.4%; Shanghai aluminum prices fell 0.7%, while inventories declined 4.3%.
- Prices for industrial-grade and battery-grade lithium hydroxide and lithium carbonate all recorded WoW increases of 2.0% to 2.5%.
- Gold prices rose 3.8% WoW to US$4,517/oz.
- Morgan Stanley maintains its “Attractive” industry view on Greater China materials.
Report interpretation
Overview
This weekly monitor focuses on coking coal supply disruptions in Shanxi, while also reviewing supply events involving copper, lithium, and Indonesia’s strategic minerals market and comparing weekly price and inventory changes across base metals, battery metals, gold, steel, cement, coal, and glass. Morgan Stanley’s overall view on the Greater China materials industry is “Attractive.”
Core views
The report first emphasizes that coking coal supply disruptions in Shanxi are continuing. As of August 20, 54 coking coal mines in Shanxi remained shut down, representing total capacity of 58.7mntpa. The number of suspended mines and the capacity involved are the core developments in this week’s report, indicating that disruptions on the coking coal supply side have yet to be resolved. The copper supply side saw both production cuts and production increases. Codelco will suspend the key Chuquicamata and Ministro Hales copper mines, with the former having capacity of 320ktpa and the latter targeted capacity of 200ktpa. Meanwhile, Vale plans to add approximately 30ktpa of copper production at the Salobo mine. By presenting these events together, the report depicts a supply landscape in which some incremental production is occurring alongside larger-scale suspension-related disruptions. Regarding lithium and strategic minerals, the environmental impact assessment for the Jianxiawo lithium mine has entered the pre-acceptance public disclosure stage, meaning that its restart process has moved closer to formal review. Indonesia plans to launch a strategic minerals exchange in 2027, aiming to establish a domestic pricing benchmark. This initiative reflects the direction in which resource-producing countries are developing local mineral pricing systems. Weekly price and inventory data show divergent trends across base metals and battery metals. Shanghai copper prices edged down 0.2% WoW, while copper inventories increased 28.4%; Shanghai aluminum prices fell 0.7%, while aluminum inventories declined 4.3% from a week earlier. Domestic prices for industrial-grade and battery-grade lithium hydroxide rose 2.2% and 2.0%, respectively, while prices for industrial-grade and battery-grade lithium carbonate increased 2.5% and 2.4%, respectively. Gold prices performed more strongly, rising 3.8% WoW to US$4,517/oz. Steel prices were also mixed: Shanghai hot-rolled coil and cold-rolled coil prices rose 0.6% and 0.2%, respectively, Shanghai rebar prices fell 0.4%, and Tangshan billet prices increased 1.0%. Traders’ long-product inventories declined 2.0%, while flat-product inventories edged up 0.2%. As of August 21, cement prices fell 0.2% to Rmb308/t. In coal, as of August 21, the QHD5500 price remained at Rmb730/t, inventories increased 11.9% WoW to 6.88mnt, and the BSPI was broadly flat WoW. Changes in glass products were generally limited. The fiberglass industry’s average 2400tex price remained at Rmb4,067/t, float glass prices edged down 0.3% WoW, and the price of 3.2mm tempered photovoltaic glass remained at Rmb16.5/m2. Overall, materials did not move uniformly in one direction this week; instead, supply events, prices, and inventories each diverged. Against this backdrop, Morgan Stanley continues to rate the Greater China materials industry “Attractive,” reflecting its view that the industry will perform attractively relative to the relevant broad market benchmark over the next 12 to 18 months.
Analysis framework
The report first identifies mine suspensions, restart developments, and incremental production events that could alter supply, then uses WoW price and inventory changes to assess the immediate state of each materials market. Finally, it consolidates the results for coking coal, copper, lithium, gold, steel, cement, coal, and glass into a weekly monitor of the Greater China materials industry and provides an industry-level relative performance view.
Methodology notes
Mine Capacity and Supply Event Monitoring
The report assesses changes on the commodity supply side using the number of suspended mines, affected capacity, incremental production, and potential restart progress. Examples include comparing Codelco’s suspensions with Vale’s incremental copper production and tracking coking coal mine suspensions in Shanxi.
WoW Price and Inventory Snapshot
The report examines price and inventory changes separately to avoid assessing market conditions solely from prices. Copper prices fell 0.2% while inventories rose 28.4%, whereas aluminum prices fell 0.7% as inventories declined 4.3%, illustrating different volume-price combinations.
Tracking Mine Suspensions, Restart Approvals, and Exchange Development
The report tracks specific events that could alter supply or pricing mechanisms, including the continued suspension of coking coal mines in Shanxi, progress in the environmental impact assessment for the Jianxiawo lithium mine, and Indonesia’s plan to establish a strategic minerals exchange in 2027.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- Shanxi Coking CoalThe core supply disruption covered in this report, with mine suspensions continuing.
- Weaknesses
- As of August 20, 54 mines remained suspended, representing capacity of 58.7mntpa.
- CopperCodelco’s mine suspensions and Vale’s incremental production are simultaneously affecting global copper supply dynamics.
- Strengths
- Vale plans to add approximately 30ktpa of copper production at the Salobo mine.
- Weaknesses
- Codelco plans to suspend the Chuquicamata mine, with capacity of 320ktpa, and the Ministro Hales mine, with targeted capacity of 200ktpa.
- Comparison
- Shanghai copper prices fell 0.2% WoW, while inventories increased 28.4%.
- LithiumApproval for restarting the Jianxiawo lithium mine is progressing, while domestic prices for major lithium salts are rising.
- Strengths
- Prices for industrial-grade and battery-grade lithium hydroxide and lithium carbonate all increased WoW.
- Weaknesses
- The Jianxiawo lithium mine remains at the pre-acceptance public disclosure stage of its environmental impact assessment and has not yet completed the restart review.
- Comparison
- Lithium hydroxide increased 2.0% to 2.2%, while lithium carbonate rose 2.4% to 2.5%.
- GoldIts weekly price increase was relatively pronounced among the major materials presented in the report.
- Strengths
- The price rose 3.8% WoW to US$4,517/oz.
- SteelPrices and inventories diverged across different steel products.
- Strengths
- Prices for hot-rolled coil, cold-rolled coil, and Tangshan billet rose 0.6%, 0.2%, and 1.0%, respectively.
- Weaknesses
- Shanghai rebar prices fell 0.4%, while flat-product inventories increased 0.2%.
- Comparison
- Traders’ long-product inventories declined 2.0%, while flat-product inventories increased 0.2%.
- CoalThermal coal prices were stable, but inventories rose significantly.
- Strengths
- The QHD5500 price remained at Rmb730/t as of August 21.
- Weaknesses
- Inventories increased 11.9% WoW to 6.88mnt.
- Comparison
- The BSPI was broadly flat WoW.
- GlassFiberglass and photovoltaic glass prices were stable, while float glass declined slightly.
- Strengths
- The average 2400tex fiberglass price remained at Rmb4,067/t, while 3.2mm tempered photovoltaic glass remained at Rmb16.5/m2.
- Weaknesses
- Float glass prices declined 0.3% WoW.
Key data
- Number of Suspended Coking Coal Mines in Shanxi54 minesStill suspended as of August 20
- Suspended Coking Coal Capacity in Shanxi58.7mntpaCombined capacity of the 54 suspended mines
- Chuquicamata Copper Mine Capacity320ktpaKey copper mine that Codelco plans to suspend
- Ministro Hales Copper Mine Target Capacity200ktpa targetCopper mine that Codelco plans to suspend
- Incremental Salobo Copper Mine ProductionApproximately 30ktpaCopper production that Vale plans to add
- Planned Launch Date for Indonesia’s Strategic Minerals Exchange2027Aims to establish a domestic Indonesian pricing benchmark
- Shanghai Copper Price-0.2% WoWEdged down WoW
- Shanghai Copper Inventories+28.4% WoWIncreased significantly WoW
- Shanghai Aluminum Price-0.7% WoWDeclined WoW
- Shanghai Aluminum Inventories-4.3% WoWDeclined from a week earlier
- Industrial-Grade and Battery-Grade Lithium Hydroxide Prices+2.2% WoW, +2.0% WoWDomestic prices increased, respectively
- Industrial-Grade and Battery-Grade Lithium Carbonate Prices+2.5% WoW, +2.4% WoWDomestic prices increased, respectively
- Gold PriceUS$4,517/ozRose 3.8% WoW
- Shanghai Hot-Rolled and Cold-Rolled Coil Prices+0.6% WoW, +0.2% WoWPrices for both flat-steel products increased
- Shanghai Rebar and Tangshan Billet Prices-0.4% WoW, +1.0% WoWRebar declined, while billet increased
- Traders’ Long-Product and Flat-Product Inventories-2.0% WoW, +0.2% WoWLong-product inventories declined, while flat-product inventories edged up
- Cement PriceRmb308/tDown 0.2% WoW as of August 21
- QHD5500 Coal PriceRmb730/tUnchanged as of August 21
- Coal Inventories6.88mntIncreased 11.9% WoW, while the BSPI was broadly flat over the same period
- Average 2400tex Fiberglass PriceRmb4,067/tUnchanged
- Float Glass Price-0.3% WoWEdged down WoW
- 3.2mm Tempered Photovoltaic Glass PriceRmb16.5/m2Unchanged
Impact & implications
The report shows that the principal signals in materials markets come from persistent coking coal supply disruptions, the coexistence of copper mine suspensions and production increases, progress toward restarting a lithium mine, and the development of Indonesia’s pricing mechanism. Weekly prices and inventories did not move in a consistent direction, but Morgan Stanley maintains its “Attractive” view on the Greater China materials industry, expecting it to perform attractively relative to the relevant broad market benchmark over the next 12 to 18 months.