Deadly China Mine Accident Triggers Coal Price Surge Amid Global Concerns

Coal prices remained stagnant in early-week trading as financial markets await China’s response following a major mining accident.

On Monday (25 May 2026), coal closed at US$136.45 per troy ounce, unchanged from Friday’s close.

However, coking coal prices in China surged this week following a deadly gas explosion at a Shanxi province coal mine, sparking market concerns over potential supply disruptions.

The accident prompted Chinese authorities to impose sweeping safety inspections, with several major coal-producing mines temporarily halting operations for post-incident checks.

This has raised market fears of tightened coking coal supply amid strong demand from the steel industry, causing domestic Chinese coking coal prices to rise sharply in recent days.

Market participants believe the mine shutdowns could disrupt short-term supply chains, particularly if inspections take longer than expected. Rising price sentiment is further bolstered by relatively low coal stockpiles in key Chinese regions.

Shanxi is one of China’s main coal-producing regions, including for coking coal used in steel production. Consequently, any production disruption there typically has a significant impact on energy commodity and steel raw material prices in China.

Prices hit their highest level in nearly two weeks after a wave of strict safety inspections at major production hubs following the fatal accident raised expectations of supply constraints.

A gas explosion at the Liushenyu coal mine in northern China’s Shanxi province on Friday night killed 82 people, marking the country’s deadliest mining accident since 2009.

The mine is owned by Shanxi Tongzhou Coal Coking Group, with all four of its mines closed and executives detained, local officials said in a Sunday press conference.

State media People’s Daily published a leading editorial on Sunday morning, calling for greater attention to production safety and to ‘completely reverse the trend of prioritising development over safety.’

The most actively traded coking coal contract on the Dalian Commodity Exchange (DCE) hit the daily price limit, surging 7.97% to CNY1,266.5 (US$186.77) per metric ton—the highest since 12 May.

Meanwhile, the most active coke contract on the DCE jumped 7.99% to CNY1,879 per ton, the strongest level since 6 May.

A survey by consultancy Mysteel indicated several other Shanxi coal mines halted production for three to five days for safety checks, potentially reducing coking coal supply by up to 288,000 tonnes per day.

‘Coking coal supply is expected to shrink while demand remains strong, supporting prices in the short term,’ wrote analysts at Wuchan Zhongda Futures in a note to Reuters.

Iron ore prices pared earlier gains after weekly shipments from Australia and Brazil surged 22% week-on-week, according to Mysteel data.

The most active iron ore contract on the DCE closed up 0.06% at CNY793 per ton, while the June iron ore benchmark on the Singapore Exchange rose 0.49% to US$106.7 per ton at 08:09 GMT.

Key steel products on the Shanghai Futures Exchange mostly rose alongside higher raw material costs.

Rebar prices rose 1.48%, hot-rolled coil gained 1.39%, wire rod surged 2.36%, while stainless steel remained relatively stable.