Iron-ore headed for a monthly loss as a short-lived rally triggered by a fatal steelmaking-coal mine accident in China’s Shanxi province faded, leaving investors focused on mill margins and mounting shipments.

Singapore iron-ore futures were down 1.2% in May, putting prices on track for the first monthly drop since February. The market is still assessing the impact on steel margins from a rise in coking coal prices after the mine explosion cut off some raw material supply.

At least 82 people were killed and more than 120 injured after an explosion onMay 22 at the Liushenyu coal mine in Shanxi province,

“The surge in coking coal prices following the fatal mining accident in Shanxi late last week is adding pressure to steel mill margins, reinforcing the view that iron-ore prices should remain capped in the $105/t to $110/t range,” said Robert Rennie, head of commodity and carbon research at Westpac Banking Corp.

Still, demand for higher-grade raw materials has offered some support. Mills have been increasing purchases of premium lump ore to reduce coke consumption and offset rising input costs, Rennie said.

Weekly data from consultancy Mysteel showed blast furnace operating rates were unchanged from a week earlier, while China’s steel mill profitability slipped to 62.3%. Separate Mysteel data showed shipment volumes from Australia and Brazil were close to a two-year high, adding to concerns about ample seaborne supply.

Domestic coking coal futures surged earlier this week, hitting the daily trading limit Monday, on concerns accident-related safety checks could tighten supply. Prices were at 1 292 yuan ($191) a ton nearing month-end, up 0.2% from April, extending the previous month’s 12% gain.

Bulk shipping markets also strengthened. The Baltic Exchange’s main dry bulk index climbed 3.3% to 3 226 points on Thursday in London, the highest level this year, and is up more than 20% in May as vessel demand — including those used to carry iron-ore — remained strong across all major segments.

Iron-ore rose 0.5% to $105.85/t at 11:33 a.m. in Singapore. Iron-ore futures in Dalian and Shanghai steel contracts also advanced.