Coking coal options listed in the first month operate smoothly, and the initial functions of serving the coal, coke, and steel industry chain are beginning to emerge

On January 16, 2026, coking coal options were officially listed on the Dalian Commodity Exchange. Since their debut, the options have operated smoothly, with price discovery and risk management functions beginning to emerge. Industry participants have become more active, injecting new momentum into serving the real economy’s high-quality development.

As a core raw material for the steel industry, fluctuations in coking coal prices directly impact the profitability and operational stability of enterprises along the coal-to-steel supply chain. The listing of coking coal options further improves the derivative tools system for steel raw materials, offering more flexible and precise risk hedging options for industry companies. The first month coincided with the Spring Festival holiday, during which the spot market experienced weak supply and demand. Coking coal spot prices fluctuated within a range, but the options contracts were reasonably priced, with tight spot and futures linkage, effectively supporting risk management.

As a major domestic trader and a long-time service provider in the coal, coke, and steel industry chain, Zhongji Ningbo Group Co., Ltd. (hereinafter “Zhongji Ningbo”) actively deployed in the first month of the options’ listing. They optimized management through a “futures + options” combined approach. “Coking coal options provide risk management solutions across multiple scenarios for the coal-to-steel industry chain,” said a relevant person from Zhongji Ningbo. The company has already applied options to spot inventory management, effectively avoiding depreciation risks of coking coal stocks. Additionally, the fair pricing of coking coal options and the objective reflection of implied volatility of market expectations for future supply and demand provide strong support for business decision-making.

Shanxi Yaxin Energy Group Co., Ltd. (hereinafter “Yaxin Shanxi”) leverages coking coal options to achieve both risk hedging and profit enhancement. As a leading coal enterprise integrating raw coal mining, beneficiation, coking, and deep processing of coke oven gas, Yaxin Shanxi has an annual coking capacity of 3 million tons and coal washing capacity exceeding 6 million tons. Around the Spring Festival holiday, facing weak supply and demand and price fluctuations, the company used coking coal futures and options to establish covered strategies, locking in high-margin sales profits and further increasing earnings through options sales.

“Since the launch, coking coal options have operated smoothly, with tight spot and futures linkage, and initial risk management functions have been demonstrated,” said Liu Yajun, General Manager of Futures Business at Yaxin Shanxi. The introduction of coking coal options not only enriches the risk hedging toolkit for the industry chain but also strengthens the risk resistance of real enterprises through financial means. Companies can flexibly use options in different scenarios: during low-profit, high-inventory phases, to manage stocks at low cost; coking plants can hedge raw material price volatility with spot-futures strategies to lock in maximum procurement costs; and in cooperation with downstream enterprises, customized risk management services can be provided based on options to improve supply chain coordination.

Market data shows that as of the close on February 24, coking coal options had been traded for 22 days, with a total volume of 1.1843 million lots and a transaction value of 3.137 billion yuan. The average daily trading volume was 53,800 lots, with an average open interest of 57,200 lots. The trading ratio of options to futures was 5.46%, and the open interest ratio was 9.12%. Implied volatility for the main series JM2604 at-the-money contracts was 42.81% on February 24, about 5 percentage points higher than the historical volatility of the underlying futures at 37.99%, indicating a reasonable level. It was roughly the same as the implied volatility of 42.51% at the main contract’s listing day, reflecting rational and stable market expectations.

Industry experts are optimistic about the future development of coking coal options. A relevant person from Zhongji Ningbo stated that amid the current squeezed profit margins in the industry chain, more companies are seeking to lock in raw material prices and forward profits through coking coal options. As the market matures, liquidity improves, and various combination strategies are increasingly applied, market activity is expected to further increase. The company will continue to focus on products related to coal, coke, and steel, deepening industry chain services and providing more professional and high-quality integrated services for upstream and downstream enterprises.

Hou Jian, Senior Researcher of Black Products at Greentown China, believes that the initial listing of coking coal options coincided with the industry’s traditional off-season, characterized by weak terminal demand and supply-demand imbalance. As companies resume production after the holiday, downstream steel mills are expected to gradually replenish inventories, and coking coal companies will maintain destocking. The market is likely to remain weak with oscillations, and the risk management value of coking coal options will become more prominent.

To ensure the smooth listing and effective function of coking coal options, Dalian Commodity Exchange held multiple online and offline training sessions on contract rules and practical applications before and after the listing, helping enterprises familiarize themselves with the tools and participate scientifically, laying a solid foundation for healthy market operation.

Looking ahead, Dalian Commodity Exchange will deepen cooperation with industry organizations, leading enterprises, and futures companies, continuously strengthen market cultivation and investor education, guide enterprises to use coking coal options properly for risk management, and improve the quality and efficiency of derivative markets serving the real economy. This will support the safe, stable, and high-quality development of the coal, coke, and steel supply chain.

(Dalian Commodity Exchange)

(Edited by: Xu Nannan)