Morning Bites (part 2)

⛏️China is capping coal output to support prices, Reuters reports, citing representatives of local mining companies and industry analysts. Specifically, in Shanxi — China’s top-coal producing province — 54 out of 153 coking coal mines (with a combined capacity of 61mnt, or 5.5% of global coking supply and 17% of global exports in 2024) suspended production or cut output, according to Mysteel agency

The decision was also linked to safety and environmental controls ahead of China’s large scale military parade on 3 September (a recurring practice during major national events)

Overall, the supply cap might add some support to global coking coal prices, at least in the short term, we believe. We also remind readers that coking coal (HCC FOB Australia) is trading below the 90%-ile cash cost (~210 USD/t in 2025, on our numbers)

#coal