Steel Plateau Limits Growth
Global coking coal demand is tied to blast furnace steel production. With Chinese crude steel output plateaued at 1,000-1,050 Mt/yr and worldsteel forecasting only 0.3% growth in 2026, coking coal demand growth is anemic (FACT: worldsteel, April 2026).
China's EAF share is growing but from a low base (12% in 2025). Each percentage point shift from BOF to EAF reduces coking coal demand by approximately 8 Mt. However, this transition will take years.
Supply Constraints Are Real
Australian coking coal exports are constrained by rail and port capacity. Queensland's coal rail network operates at 90%+ utilization with limited expansion options. La Niña weather risks add supply disruption premiums (FACT: Queensland Resources Council, 2026).
Russian coking coal exports face sanctions and logistics challenges. Mongolian coking coal (Tavan Tolgoi) offers alternative supply but quality issues (higher ash, lower CSR) limit blending rates to 10-15%.
Regional Breakdown
Australia: Largest seaborne supplier at ~150 Mt/yr. Premium HCC at $240-280/t. Rail and port constraints limit volume growth.
China: Largest importer, imports ~70 Mt/yr. Domestic production is high ash, lower quality. Relies on Australian and Mongolian imports for blending.
India: Growing importer at ~50 Mt/yr. Steel capacity expansion under National Steel Policy adds 5-7 Mt/yr of coking coal demand.
Mongolia: Growth supplier at ~20 Mt/yr to China. Quality constraints limit blending rates but expansion potential is significant.
Procurement teams purchasing coking coal in 2026 should prioritize supplier diversification, lock in annual volumes where possible, and monitor the shifting trade policy landscape.