The coal sector rises against the market trend, with Liaoning Energy hitting the daily limit and buy orders once exceeding 1.24 million shares.

How do AI and geopolitical conflicts impact the surge in coking coal futures prices?

On March 23, the Shanghai Composite Index briefly fell below 3,900 points. In terms of sectors, the coal industry surged against the trend, with Liaoning Energy hitting the daily limit-up, with buy orders exceeding 1.24 million lots at the best bid. As of 10:10 AM, Liaoning Energy was trading at 4.73 yuan per share.

On the news front, the main contract of coking coal futures hit the daily limit-up, rising 11% to 1,289.5 yuan per ton.

This round of rising coking coal futures may be influenced by geopolitical conflicts. Copper Crown Futures pointed out that escalating Middle East tensions have led to the shutdown of Qatar’s LNG facilities, keeping international oil prices high. As a broad energy asset, coking coal is being re-priced by funds. Meanwhile, the hidden demand in the coal chemical chain also provides significant support. The profit margin for methanol produced from coke oven gas has improved markedly, and high profits in the chemical sector support blast furnace operation rates, driving demand for coking coal to spill over from the steel industry to the energy and chemical industries.

From the supply and demand perspective, Anliang Futures noted that the coking coal market is in a pattern of both supply and demand growth, with geopolitical premiums only causing short-term fluctuations. On the supply side, domestic coal mines have resumed production to the levels of the same period last year, with high throughput at Mongolian coal ports (Ganquimao Port averaging 1,400 trucks daily). However, accumulated inventories at Mongolian ports may limit subsequent increases. On the demand side, steel mills are ramping up production (hot metal output rebounded to 2.212 million tons), but coke oven profit margins are under pressure (J2605 basis spread at -85 yuan/ton). Downstream procurement is mainly driven by immediate needs. Additionally, conflicts between the US and Iran have pushed up energy prices, reinforcing the logic of coal substitution. However, ample supply and inventory pressures are constraining upward space.

Looking ahead, Anliang Futures believes that under the broad supply and demand conditions, short-term fluctuations in coking coal and coke prices are likely to persist. It is recommended to monitor actual procurement efforts by steel mills, coal mine capacity releases, and policy implementation, while remaining alert to price volatility risks.

(Note: The content of this article is for reference only and does not constitute investment advice. Investors operate at their own risk.)