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Coking Coal Overview
Coking coal, also known as metallurgical coal, is used mainly to make iron and steel. It has very low ash, moisture, sulphur, and phosphorus, which makes it cleaner than regular coal. On the other hand, non-coking coal, which is also called thermal coal, is used in power generation.
Coking coal cannot be used directly in iron and steel making. First, coking coal is heated in the absence of air (low-oxygen environment). This turns it into a porous, carbon-rich material called coke. Coke is then used in blast furnaces, which help melt iron ore and produce a liquid metal called pig iron. This is the first step in making steel.
Coking coal is known for its ability to form coke. It is divided into different types, such as hard coking coal (HCC), medium coking coal (MCC), semi-soft coking coal (SSCC), and pulverized coal for injection (PCI).
Only a few countries in the world produce most of the coking coal. These include China, Australia, Russia, the USA, and Canada. The ups and downs in the coking coal market mostly depend on these major producing countries. However, countries that import coking coal also play an important role in affecting the global market.
Recently, the global coking coal market has been slow. This is because miners have resumed production, while buyers are waiting to see what happens next. Let’s take a closer look at the current situation in the global coking coal market.
Global Coking Coal Market Faces Pressure Amid Surplus and Cautious Demand
Market Analysis
China is the world’s largest steelmaker and a major importer of coking coal. The country also consumes a large amount of its own locally produced coking coal. Right now, Chinese coal mines have more supply than needed. This extra supply has caused miners to lower their prices to sell off the surplus. As a result, imports of coking coal have decreased. Meanwhile, demand from coke plants has remained steady.
After using its own coking coal, China meets the rest of its needs by importing from Australia and other countries. In China, the prices for Australian-origin (premium grade) coking coal fell by $3-5/ton reaching the level of $174-176/ton on CNF basis.
Because of overproduction, Chinese miners are trying to sell their surplus coking coal to other countries. From January to March 2025, China’s coking coal exports went up by almost 2%, reaching 1.46 million tons. In March 2025 alone, 490,000 tons were exported, which is a 24% increase compared to February 2025. Market participants hope the situation will improve once the stock declines.
Also, Australia is one of the top exporters of premium coking coal in the world. It plays an important role in the global coking coal market. The country provides about 17% of the world’s coking coal supply.
In Australia, Queensland-based miners are set to resume material supply again after stopping production due to heavy rains in the region. This has caused prices to fall further. The offers for premium coking coal dropped slightly by $1–2/ton, reaching $190–192/ton on a FoB basis.
However, market players in the country expect prices to stabilise soon. This is because Indian coke plants will start buying coking coal to build up their stock before the monsoon season arrives.
In addition, the Indian steel market also affects the global coking coal and steel sentiments. India is the world’s second-largest steel producer after China. It is also a net importer of coking coal. As per the latest report, India’s coking coal imports remained at 5.2 million tons (up by 7%) in April 2025, month on month. Major shipments were noticed from Australia and Mozambique.
In the Indian domestic market, offers for premium cocking coal remained stable on weekly basis. The current prices hover at around $205-207/ton CNF Paradip, India. As per some reports, buyers remained unsure about the current market prices, so they were buying carefully. Many of them were also looking for cheaper options. Because of low demand, buyers were hesitant to pay higher prices.
According to market participants, India is planning to approach Mongolia for its cocking coal requirements. Since Mongolia is a landlocked country, transport through China is under consideration.Top of FormBottom of Form
On the other hand, India has imposed quantitative restrictions (QR) on the import of low-ash metallurgical coke from January 1 to June 30, 2025. These restrictions apply to coke with ash content below 18% and are based on country-specific quotas. This means that only a fixed amount can be imported from each country. Importers must get permission from the Directorate General of Foreign Trade (DGFT) before bringing coke into the country.
The Indian government made this decision to deal with a sharp rise in imports. The government also wants to support the local merchant coke industry, which has been facing financial losses because of imported coke. These restrictions went into effect in January 2025. They are meant to reduce dependence on foreign suppliers and encourage more domestic production.
Outlook
The global coking coal market showed a mixed response. However, the market is expected to showcase a bearish trend further. Few market participants anticipate prices to remain firm amid supply ease. Still, market participants are expected to continue their wait-and-watch approach while booking material.
