Everbright Futures: Coking coal surges then pulls back, fundamentals still support

After consecutive rebounds, coking coal futures weakened today with volatility. By the close, based on the closing price, the main contract of coking coal fell approximately 1.2%, making it one of the top decliners in the black commodities sector.
From a fundamental perspective, the supply and demand pattern of coking coal has not undergone any substantial change. On the demand side, the recovery in terminal steel prices has driven profit restoration for steel mills, with blast furnace operations remaining high, resulting in strong rigid demand for coke. Meanwhile, approaching the May Day holiday, steel mills have some raw material stocking needs, and recent replenishment enthusiasm has increased. Additionally, profits for coking enterprises have also improved, with some coke companies moderately purchasing high-quality coal types to replenish stocks, which has supported coking coal procurement.
On the supply side, coal mines in producing regions are affected by safety supervision disruptions, and capacity release is somewhat limited, with short-term incremental supply being limited.
Overall, today’s decline in the coking coal market is most likely due to a phase of emotional correction after a continuous rebound, rather than a fundamental weakening. Under the backdrop of resilient demand and restricted supply, it is expected that the short-term coking coal market will continue to maintain a relatively strong trend. Attention should be paid to the replenishment pace before the holiday and related policy changes. (Everbright Futures)