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The global coking coal market in 2025 faced weak steel production and trade pressures, but strong demand from India and Southeast Asia, limited supply growth, and slow green steel adoption are expected to support prices and market tightness ahead. Let us understand in detail.
Global Coking Coal Market Faces 2025 Headwinds, While India-Led Steel Growth Supports Outlook
The coking coal market throughout 2025 has been influenced by several challenging factors, including geopolitical tensions, slower steel production, trade disruptions, and delays in the shift toward green steel.
Changes in the government policies, weak steel demand, and limited growth in China’s coal exports have further reshaped the market outlook.
Between January and November 2025, the global crude steel production reached around 1.662 billion tonnes, marking a 2% decline compared with the same period in 2024.
This slowdown in steel output directly reduced demand for coking coal. Most major steel-producing countries recorded lower production levels during this period. However, India and the United States stood out, as both countries continued to show growth in steel output.
At the same time, US tariffs on Northeast Asian automakers reduced vehicle production and steel demand, which in turn lowered coking coal imports. In Europe, weaker steel production and strict energy transition policies also weighed on coking coal consumption.
Despite these short-term pressures, strong demand from key steelmaking regions and limited supply growth are increasing the risk of a coking coal shortage. According to Australian mining sources, demand for coking coal continues to grow faster than new supply.
India and Southeast Asia are making major investments in steel sector and increasing steelmaking capacity, which ensures long-term dependence on coking coal. This is indicating a significant growth potential in the year 2026.
India’s steel capacity is expected to rise from 190 million tonnes to 300 million tonnes by 2030 and further to 500 million tonnes by 2050. In Southeast Asia, crude steel production currently stands at about 82 million tonnes and is forecast to add up another 50-60 million tonnes over the next five years.
At the same time, low-carbon steelmaking technologies are still far from large-scale commercial use. Europe’s transition to green steel has been slower than expected, suggesting that coking coal demand in the region is likely to remain stable in the near term, supporting global demand.
On the supply side, new coking coal projects face rising costs, stricter environmental regulations, and long approval timelines in Australia. Higher coal royalties in Queensland have also raised production costs, reducing incentives for rapid capacity expansion. As a result, analysts expect the global seaborne coking coal supply to struggle to keep pace with demand beyond 2026.
Additionally, China’s coking coal exports are unlikely to increase significantly against overseas demand. Factors such as high transport costs, lower competitiveness of domestic coking coal compared with seaborne coal, and limited policy support from the government restrict China’s export growth.
Also, foreign buyers are preferring high-quality coal, which is further reducing demand for Chinese coal and limiting the potential growth of China’s coal exports.
Future Outlook
Looking ahead, the global coking coal market is expected to remain tight and volatile. While for the short-term period, demand may fluctuate.
With steel production cycles, strong growth in India and Southeast Asia, combined with slow supply expansion and delayed green steel adoption, these factors are likely to support coking coal demand and prices in the medium term.
