Geopolitical Tensions and Supply Constraints Impact Coking Coal Market

The Coaltrans Asia 2025 conference, held in Bali, Indonesia, gathered experts to discuss the global coking coal and steel markets. The key issues raised included geopolitical tensions, supply disruptions, and the slow shift to green steel. These factors are set to impact coking coal demand and supply in the coming years.

In the first seven months of 2025, global crude steel production fell by 1.9%. This caused reduced demand for coking coal. Major producers like China and Japan saw declines in output, while India and the U.S. posted growth. U.S. steel tariffs and Europe’s energy transition policies further hurt coking coal imports.

India and Southeast Asia Lead Growth in Steel Production

Although global steel production declined, India and Southeast Asia are set for strong growth. India’s steel consumption is well below the global average. Projections show India’s capacity will grow to 500 million tonnes by 2050. Southeast Asia expects an increase of 40-50 million tonnes over the next five years.

These regions will rely heavily on coking coal, ensuring sustained demand for the material. However, low-carbon steel technologies are still far from commercial viability, meaning coking coal will remain essential in steel production for the foreseeable future.

Challenges on the Supply Side: Rising Costs and Regulatory Hurdles

On the supply side, new steelmaking coal projects face mounting difficulties. Rising costs, stricter regulations, and long approval processes are key barriers. In Australia, mine approval timelines have increased by 60% since 2019. Additionally, rising royalty fees linked to higher coal prices are further straining supply.

China is increasing its coking coal exports, but faces challenges. High transportation costs and a preference for higher-quality coal in international markets limit growth. Furthermore, coal exports contribute very little to China’s total export value, so the government is unlikely to alter its export policies.

SuperMetalPrice Commentary:

The global coking coal market is navigating a period of uncertainty, shaped by geopolitical tensions, supply constraints, and the slow pace of technological innovation in steelmaking. While regions like India and Southeast Asia continue to drive growth, the challenges on the supply side remain a concern for meeting future demand. The tightening of seaborne supply, combined with rising production costs and regulations, suggests that coking coal prices will likely remain volatile in the coming years. As a result, industry players must stay agile, balancing investments in new projects with the realities of shifting global dynamics.