Global Coking Coal Market Faces Tightening Supply Amidst Shifting Demand
The global coking coal market is experiencing a tightening of supply as demand remains robust, potentially impacting steel production costs worldwide.
Discussions at the recent Coaltrans Asia 2025 conference in Bali, Indonesia, highlighted a 1.9% year-on-year decline in global crude steel production through the first seven months of 2025, reaching 1.09 billion tonnes. While China’s output decreased by 3.1% to 594.5 million tonnes, India and the United States saw increases of 9.8% and 1.5% respectively, reaching 94.9 million and 47.4 million tonnes. Geopolitical tensions, US import tariffs, and economic slowdowns are contributing to these trade disruptions.
Despite the overall decline in steel production, strong demand from India and Southeast Asia is driving continued reliance on coking coal. India’s crude steel production capacity is projected to grow from 190 million tonnes currently to 300 million tonnes by 2031, and ultimately 500 million tonnes by 2050, fueled by a per capita finished steel consumption of 104 kg – less than half the global average. Southeast Asia is also expected to add 40-50 million tonnes of crude steel production capacity over the next five years. Australia’s Minerals Council of Australia reports that approval timelines for new mines have increased by 60% since 2019, now averaging 1,371 days, hindering supply growth.
Supply-side challenges are further compounded by rising costs and stricter regulations, particularly in Queensland, Australia, where royalty fees have increased significantly since July 2022. At a coking coal price of $200 per tonne, the royalty is approximately $34, a $10 increase from the previous structure, and rises to $54 per tonne at $250. Industry analysts forecast that global seaborne supply will struggle to meet demand beyond 2026, even with planned projects. China’s coking coal exports, while up 65% year-on-year to 810,000 tonnes through July 2025, remain limited due to high transportation costs and a preference for higher-quality coal, as detailed in reports from the International Energy Agency.
Officials anticipate continued monitoring of these trends to assess the long-term impact on the steelmaking industry and global trade.
