Global coking coal prices fell at the beginning of the year

Analysts expect prices for these raw materials to remain below $200/t in the first half of the year.

In the first week of 2025, Australian coking coal prices were rising due to interest from India. Some market participants from this country were concerned about restrictions on coke imports and the corresponding increase in the domestic price.

At the end of 2024, India introduced quarterly import quotas for low-ash metallurgical coke for six months (January 1 – June 30). Such imports for certain countries will be allowed only with a permit issued by the Directorate General of Foreign Trade. In the first half of 2025, the total volume of supplies is limited to 713.58 thousand tons per quarter. The government’s decision has caused concern among leading steel companies such as JSW Steel and ArcelorMittal Nippon Steel.

In total, supplies from 11 countries were subject to the restrictions. It was expected that Indonesia would be the most affected by this step, as it has recently become one of the main suppliers of coke to India.

Despite the improvement in sentiment amid Indian interest, the price of coking coal continued to be pressured at the beginning of the year by the situation in China, where domestic prices for this raw material fell.

Overall, in January, the oversupplied seaborne coking coal market was largely driven by India’s buying interest. Demand from China remained weak throughout the month, as the country saw several rounds of price cuts for domestic coke.

The impact of India’s decision on import quotas for low-ash coke has not yet led to higher coking coal prices. However, local traders expect future growth in demand for this raw material, as the Indian steel market showed signs of recovery at the beginning of the year.

Last month (January 2-31), prices for Australian premium coking coal (FOB Australia), according to S&P Global, fell by 6.8% – to $186.25 per tonne at the end of January. At the same time, in the Chinese market (CFR China), they fell by 4.6% – to $187 per tonne in the same period.

In February, the seaborne coking coal market was affected by Chinese tariffs on energy supplies from the United States, which were imposed after Donald Trump imposed an additional 10 percent duty on all Chinese imports.

On February 4, Beijing responded to the United States by imposing a 15% import duty on U.S. coal and LNG and a 10% duty on crude oil.

China’s total seaborne imports of coking coal last year amounted to 43.02 million tons, of which 5.02 million tons (11.7%) came from the United States. In total, imports of this raw material to the country amounted to a record 121.7 million tons in 2024.

The United States was the fourth largest supplier of seaborne coking coal to the country after Australia, Russia and Canada. If the new tariffs, the observer explains, make American steelmaking raw materials uncompetitive in the Chinese market, local steelmakers will have to find suitable alternatives. Australia and Canada, for example, could become such alternatives, but Chinese steelmakers will probably have to offer a higher price to draw away the offer from competitors from other countries.

During the week ending February 7 (January 31-February 7), FOB Australia quotes rose slightly to $188/t. The CFR China price on that date was $186/t.

American coal that was already heading to China by sea during this period was subject to a 15% tariff. The sudden surplus of American cargoes that need to find new buyers, according to traders, will compete with unsold Australian raw materials amid still weak demand.

At the end of last week, on February 14, prices for Australian coking coal rose slightly, exceeding $191/t despite weak market sentiment. Traders note the lack of active purchases of this raw material in China. Chinese local prices for coking coal instead fell compared to the previous week. Supply was affected by another round of declines in domestic coke prices and improved production after the Lunar New Year.

Currently, analysts expect coking coal prices to remain below $200/t in the first half of 2025 in the absence of strong incentives from China. Demand for this raw material may rise due to India and its coke supply quotas. Since the beginning of this year, coking coal prices have averaged $197/t.