The decline in coking coal has narrowed, and market sentiment is beginning to diverge

Entering June, the overall auction market for coking coal (1556, -15.00, -0.95%) remains weak, with unsold bids still present. However, the auction results in the market have fluctuated, and the decline in the focus of transactions is also decreasing.
From the supply side, domestic coal mines have basically maintained normal production. Although some coal mines have stopped production for maintenance due to the safety production month, the overall impact is limited and the supply is relatively sufficient. At the same time, port inventory is at a high level, Mongolian coal auctions are severely unsold, traders are selling at a loss, and the market demand for imported coking coal is relatively weak.
From the demand side, the downstream coke market (2232, -47.00, -2.06%) has seen a strong willingness to lower the purchase price of raw coal due to the third round of price increases and decreases, which has led to an expansion of losses for coking plants. In addition, the steel market has entered a low season, with weak demand, decreased profitability of steel mills, reduced production of molten iron, and weakened rigid demand for coking coal, resulting in low activity in the coking coal auction market.
In this supply-demand pattern, the auction price of coking coal fluctuates. For example, the average auction price of Changzhi Qinyuan Qinxin low sulfur lean main coking coal on June 10th increased by 31 yuan/ton compared to the 4th, but this is only the case in a few regions. Overall, the auction prices of coking coal in most regions are still facing downward pressure or maintaining weak stability, and the decline in transaction volume has narrowed.
As of June 11th, there seems to be signs of a rebound in the bidding market sentiment, with some coal types beginning to tentatively raise their starting prices. Shanjiao Group has also formulated a long-term cooperative quantity and price preferential policy for June based on market conditions: the base price remains unchanged, the contract at the beginning of the year remains basically stable, and the quantity and price of different coal types are linked. If the monthly average redemption rate and sub station redemption rate are met, the preferential policy can be enjoyed. Specifically, for coking coal with a contract exchange rate of 85% -95% in June, a discount of 130-170 yuan/ton will be offered; Fat coal with a monthly contract exchange rate of 85% -95% will receive a discount of 180-200 yuan/ton; 1/3 coking coal with a monthly contract exchange rate of 85% -95%, discounted by 110-130 yuan/ton; Discounts of 120-130 yuan/ton for lean coal and lean coal with a monthly contract exchange rate of 85% -95%; Gas and coal with a monthly contract exchange rate of 85% -95% can enjoy discounts ranging from 90-100 yuan/ton.
In summary, the June coking coal auction market was affected by factors such as loose supply and demand, weak downstream demand, and the impact of imported coal, resulting in poor overall performance and a relatively weak price trend. However, some regions have successively introduced preferential policies, which have a certain boosting effect on the sentiment of the coking coal market. If there is no significant improvement in the demand side in the short term, the auction price of coking coal may remain low or fluctuate weakly.