US Adds Coking Coal to List of Critical Materials to Boost Domestic Production

The United States Department of Energy (DOE) has officially classified coking coal as a critical material. This marks a key step to increasing domestic production of metallurgical coal for steel production. This move comes as part of an effort to reduce dependency on imports and support the nation’s steel industry.

Increased Focus on Coking Coal for Steel Production

In its recent report, the DOE highlighted the importance of coking coal in achieving the U.S.’s policy goal of dominating steel production. The department stressed that meeting this goal requires a substantial increase in the domestic production and use of metallurgical coal. The current state of the U.S. steel market heavily depends on coking coal. This reliance positions the industry on a path toward significant import dependency. The situation is compounded by declining investment in coal production infrastructure and a workforce shortage. These factors put additional pressure on the sector.

Implications for US Coal Industry and Production

The decision to classify coking coal as a critical material follows an assessment requested by U.S. President Donald Trump in 2024. With this move, U.S. coking coal producers may benefit from accelerated mining permits, tax credits, and federal grants. These incentives would help reduce costs and increase production. However, the U.S. coal market faces challenges as the global market for seaborne coking coal experiences oversupply. This situation has impacted price indices, and many U.S. producers are struggling to remain profitable. In fact, some have started reducing production in the fourth quarter of 2024.

Potential Impact on Coal Prices and Industry Consolidation

The global coking coal market has also seen fluctuations in prices. Notably, Australian premium coking coal prices increased by $5 per ton to $200 per ton FOB between April 25 and May 9, 2025. The rise in prices was driven by increased demand from Indian coke plants. In contrast, spot quotations in China dropped by $4 per ton to $175 per ton EXW. This decrease was due to local oversupply.

American coal producers have begun discussing consolidation in the industry. However, the need for such actions could be delayed if the government provides financial support to struggling companies.

The decision by the DOE to add coking coal to the critical materials list signals a significant shift in U.S. energy and industrial policies. It highlights the need for increased domestic coal production to meet the growing demands of the steel industry and reduce reliance on foreign supplies.