Shanxi injection coal auction prices rise nearly 100 yuan/ton in August

en.Wedoany.com Reported - Since August, the injection coal auction market in Shanxi's main anthracite-producing areas has warmed significantly, with raw coal and high-calorific-value cleaned coal transaction prices rising by nearly 100 yuan/ton, showing a rapid strengthening trend. Auction data across mining areas in Changzhi, Jincheng, and Jinzhong have all risen, signaling a clear shortage of resources.

For raw coal, the average transaction price of injection raw coal in the Tunliu area of Changzhi on August 9 was 995 yuan/ton, up 64 yuan/ton from early August; the average transaction price in the Zhangzi area of Changzhi was 999 yuan/ton, up 49 yuan/ton from the end of July; the average transaction price in the Gaoping area of Jincheng was 1,066 yuan/ton, up 86 yuan/ton from the end of July, recording the largest increase. For cleaned coal, the average transaction price of injection cleaned coal in the Xiangyuan area of Changzhi was 1,388 yuan/ton, up 82 yuan/ton from the end of July; the average transaction price in the Gaoping area of Jincheng was 1,240 yuan/ton, up 103 yuan/ton from the end of July; the average transaction price in the Zuoquan area of Jinzhong was 1,172 yuan/ton, up 25 yuan/ton from the end of July.

The root cause of this round of price increases lies in the sustained shortage of market-circulating coal volumes. Safety inspections have been tightened in core production areas such as Changzhi and Jincheng in Shanxi, with some mines undergoing phased production halts for maintenance, keeping raw coal output at the pithead at low levels; the operating rate of supporting coal washing plants is insufficient, limiting total commercial coal volumes. Although the province has introduced plans to promote the rectification and resumption of production at halted mines in batches, it is difficult to release sufficient incremental supply in the short term. Meanwhile, during the peak summer electricity demand period, coal demand from power plants has been strong, with raw coal resources prioritized for power supply security. A large amount of raw material coal has been diverted for thermal coal processing, squeezing the raw material supply for the injection coal washing and selection process. Pithead coal inventories at mines are generally at low levels, with strong price-supporting sentiment, underpinning spot prices.

On the demand side, despite industry-wide loss pressures, procurement resilience remains strong, even showing a situation of "the more losses, the more grabbing." Currently, the steel industry is under overall operational pressure, with profitable enterprises accounting for only slightly over 30%, and steel mills showing clear resistance to high-priced raw materials. However, production pace has not slowed significantly: the average daily hot metal output of 247 sampled steel mills nationwide has remained stable above 2.38 million tons, with blast furnace operating rates maintained at a high level of over 80%, resulting in substantial rigid daily consumption of injection coal. Due to the high cost of shutting down and restarting furnaces, steel mills are reluctant to easily cut production or conduct maintenance even when on the brink of losses, with rigid demand providing bottom-line support for coal prices. The market holds widespread bullish expectations for the traditional peak season of "Golden September and Silver October," and steel mills fear further price increases in September, prompting them to initiate concentrated stockpiling in advance in August. The concentrated release of procurement demand, coupled with continuously refreshed auction prices, has formed a cycle of "price increases—panic buying—further price increases," with downstream steel mills passively accepting higher coal prices.

Overall, the tight supply-demand fundamentals of the injection coal market in August are unlikely to be fundamentally reversed in the short term, and bullish sentiment in production areas is difficult to cool. Looking ahead to mid-to-late August, the price center of injection coal is expected to move further upward, but the pace and height of the uptrend still require close attention to whether deepening losses at steel mills trigger unexpected passive production cuts.