After a volatile “rollercoaster” in late July, capital is flowing back into China’s bulk commodity markets, with coking coal futures leading the rebound. On August 6, multiple coking coal futures contracts surged by over 6%, with the October 2025 and November 2025 contracts hitting their daily upper limits. The total open interest in coking coal futures increased by 58,000 hands in a single day, making it the largest daily increase since the sharp rallies on July 24 and 25.
During the late-July rally, coking coal futures saw a rapid rise in open interest. According to data from Wenhua Finance, before July 21, total open interest in coking coal futures was around 850,000 hands, and as prices surged, open interest hit a new high of 922,000 contracts on July 25.
That same day, the exchange adjusted trading limits for coking coal futures, saying that from the trading session on July 29, 2025 (i.e., night session on July 28), non-futures company members or clients may not open more than 500 contracts per day in the September 2025 contract and not more than 2,000 hands per day in other contracts.
After the implementation of these restrictions, capital began flowing out of coking coal futures, and over just 10 trading days, coking coal prices rose and fell by 300 yuan/ton.
Only when the market began to stabilize this week did capital begin to flow back into coking coal futures. On August 4 and August 6, open interest rose by 33,000 and 58,000 hands, respectively. As of market close on August 6, total open interest in coking coal futures had rebounded to 863,000 hands, returning to historically high levels.
Currently, the September 2025 contract remains subject to a daily position-opening limit of 500 contracts. However, due to the rollover from old to new contracts, market activity has increasingly shifted to the JM2601 contract, which has a higher daily limit of 2,000 contracts—resulting in significantly less impact from trading restrictions.
At the same time, the supply-demand situation for coking coal futures is clearly stronger than for other commodity futures. According to data from commodity information platform Mysteel, coking coal inventories at mines, coal-washing plants, and ports were all at low levels last week.
Specifically, inventory of clean coal at 523 sample mines fell by 302,000 tons to 2.483 million tons week-over-week, the lowest level since March 2024. Inventory at coal-washing plants also dropped to a nearly one-year low of 1.6638 million tons. These low inventory levels indicate a tight supply situation in the current market.
“Coking coal fundamentals have improved significantly compared to the first half of the year. The previous high-inventory, high-supply surplus situation has shifted to a phase of shortage, which provides strong support for coal prices,” according to Great Wall Futures.
Given the solid demand performance and the shift in market sentiment, the firm even stated, “In the long run, a turning point in the valuation of coal and coke may already be taking shape.”
During the volatile market of late July, the leading gainers were concentrated in the coal, building materials, and new energy materials sectors. However, as the market returned to fundamentals-based pricing, these previously leading products have shown diverging trends.
According to Wenhua Finance, as of market close on August 6, the weighted average prices for coking coal and coke futures were up 13.22% and 5.77% this week, respectively. In contrast, glass futures fell 0.17%, and lithium carbonate futures rose only 0.64%.
The strength of capital inflows also varied. For example, lithium carbonate futures saw an open interest increase of only 17,000 hands this week—within normal fluctuations. The current total open interest of 710,000 hand remains significantly lower than the 910,000-hands peak on July 25.
The reason lies in the weaker fundamentals of lithium carbonate compared to coking coal, and the problems of high output and high inventory have not been meaningfully resolved. The earlier futures price rally, driven by speculation on policy expectations, lacked sustainability.
Two common futures market indicators help illustrate this. One is the trading-to-open interest ratio. The ratio for the lithium carbonate September 2025 contract was 0.73 on June 23, and it gradually climbed above 2 and reached a short-term peak of 4.05 on July 24. Such a sharp increase in the ratio in a short time reflects a spike in speculative activity, which in turn amplified the futures price surge.
Another key metric is the futures-spot price spread. The price of futures went from a small discount to a large premium over spot prices. For example, on July 25, the domestic spot price for battery-grade lithium carbonate averaged 72,940 yuan/ton, while the settlement price for the 2509 futures contract hit 79,460 yuan/ton—a premium of 6,520 yuan. This nearly 10% premium is rare among commodity futures and was eventually corrected by a sharp drop in futures prices.
Notably, many of these futures products are basic industrial raw materials, and their price fluctuations can trigger chain reactions. For instance, ferrosilicon—made from coke, steel scrap, and quartz (or silica)—and silicomanganese alloys—composed of manganese, silicon, and iron—both saw futures contracts rise on August 6. The silicomanganese September 2025 contract rose 4.27%.