A deadly mining accident in China's biggest coal-producing region and mounting policy chaos around Indonesian exports are choking global supplies, which analysts and industry officials say could boost prices as liquefied natural gas (LNG) supplies remain tight due to the US-Israeli war on Iran.The war in Iran halted shipping in the Strait of Hormuz, through which, during normal times, a fifth of global oil and LNG supplies passes, triggering purchases of high-grade coal by Japan and South Korea and pushing the Newcastle benchmark to near two-year highs of over US$150 a metric ton.
However, purchases of lower-grade coal, typically from top exporter Indonesia, have been soft due to tepid demand from China and India, which have leaned upon sufficient inventories and renewable output to meet power demand.
That is changing after a fatal explosion at a Shanxi mine last month, analysts say, with the accident triggering sweeping safety inspections in the province and tightening domestic supplies.
China's June thermal coal imports are expected to rise 27.6 percent from a year earlier to 27.8 million metric tons to meet higher seasonal demand as local supply tightens, DBX Commodities CEO Alexandre Claude said, a substantial increase relative to tepid demand until May.
