China's coking coal supply squeeze is expected to persist into 2027, sustaining strong import demand despite efforts to revive domestic output. The shortage stems from a fatal Shanxi mine accident in May that triggered safety restrictions, with domestic production recovering only gradually. Imports from Mongolia, Australia, and Russia are rising but unlikely to fully close the gap, according to Bloomberg Intelligence analysts including Ortis Fan.

Chinese coking coal imports reached 13.1 million tons in August, down 4% from July's peak but 29% higher year-on-year, nearing the December 2025 record. The National Development and Reform Commission has urged accelerated resumption of suspended mines, allowing lower-risk operations to restart. BI analysts predict steady fourth-quarter recovery in Shanxi, but full normalization delayed until first-half 2027.

Steel mill margins remain weak, with only 7% operating profitably in September per Wood Mackenzie's Simon Wu. A Mysteel survey found 75 coking coal mines still shuttered in Shanxi as of Sept. 16, representing 73 million tons of annual capacity. Coking coal futures in Dalian have fallen 12% from August highs to 1,523.50 yuan per ton, while Singapore iron ore futures traded at $96.55 per ton.