According to the quarterly outlook report published by Australia’s Department of Industry, Science and Resources, Australia remained the world’s largest exporter of metallurgical coal in 2025-26, exporting 147 million mt, with more than 95 percent of production shipped overseas.
While metallurgical coal prices are forecast to remain broadly stable in real terms through 2031, Australian export volumes are expected to increase as production expands at major mines. However, export earnings are projected to gradually decline over the outlook period despite relatively stable prices.
India offsets weaker Chinese demand
The report stated that global metallurgical coal trade remained broadly stable in 2025 despite weaker global steel production. Lower Chinese imports were offset by stronger demand from India, supported by rising steel output, while adverse weather constrained Australian exports. Trade volumes followed normal seasonal patterns during the first quarter of 2026 before weakening in April because of softer Chinese demand. However, Chinese imports are expected to recover after mine suspensions in Shanxi following a mining accident tightened domestic coal supply.
The report noted that the Middle East conflict has had only limited direct effects on metallurgical coal supply, although higher insurance, freight and diesel costs have increased trading costs. Global seaborne metallurgical coal imports remained largely within a 25-30 million mt monthly range, while basic oxygen furnace (BOF) production continued to dominate global steelmaking despite a gradual increase in electric arc furnace (EAF) production since 2020. Longer shipping routes, particularly between the Atlantic basin and Asia, have become more expensive, improving the relative competitiveness of Australian suppliers. Although weaker global economic growth linked to the Middle East conflict may affect demand, Australia expects global metallurgical coal trade to remain broadly stable if no additional disruptions occur.
India and Southeast Asia are forecast to become the primary sources of demand growth as steel production gradually shifts away from China. At the same time, increasing adoption of EAF technology is expected to gradually reduce the share of coal-intensive BOF steelmaking, limiting long-term growth in global metallurgical coal demand.
China’s imports decline while India continues to expand
Chinese seaborne metallurgical coal imports fell 30 percent year on year in the first quarter of 2026, following a nine percent decline in 2025, as crude steel production decreased by approximately 4.6 percent, reducing China’s annual steel output below one billion mt for the first time in five years. Continued weakness in the property sector is expected to weigh on steel demand, although manufacturing has become a more important source of demand. The report also noted that EAF steelmaking currently accounts for around 11 percent of China’s steel production and is expected to expand further, reducing future metallurgical coal demand and imports.
By contrast, India continues to record strong import growth. Metallurgical coal imports increased eight percent year on year during the March quarter of 2026 after rising 13 percent in 2025. Steel production grew by around 11 percent in 2025 and is now approximately 65 percent higher than five years ago, supported by rapid economic growth and industrial development. India’s GDP is estimated to have expanded by around eight percent in 2025, while the country’s National Steel Policy aims to increase steelmaking capacity from approximately 150 million mt to 300 million mt by 2030-31. Both BOF and EAF capacities are expected to expand, although additional BOF production is expected to support higher metallurgical coal consumption.
Southeast Asia becomes an increasingly important market
Southeast Asia is also expected to become an increasingly important source of demand growth. Indonesia’s metallurgical coal imports increased 31 percent in 2025, while Vietnam’s rose 23 percent. Indonesia has become the world’s fifth-largest importer and Vietnam the eighth-largest importer of metallurgical coal. Imports into both countries have increased significantly in recent years and are forecast to continue growing as industrial activity expands. Australia remains the principal supplier to both markets.
Long-term projections indicate that China will gradually reduce imports through 2031, while India records the strongest sustained growth. Imports into Japan and South Korea are expected to remain relatively stable, with other Asian markets expanding gradually.
Prices expected to remain broadly stable through 2031
Australia projects that its metallurgical coal exports will increase from around 150 million mt in 2025-26 to approximately 163 million mt in 2028-29, before easing to 158 million mt in 2029-30 and 157 million mt in 2030-31. Export volumes are projected to increase from approximately 150 million mt in 2025-26 to 160 million mt in 2026-27, before moderating to 157 million mt by 2030-31. Export earnings are forecast to decline from A$38 billion in 2025-26 to A$39 billion in 2026-27, before falling to A$34 billion by 2030-31 in real terms.
Australian premium hard coking coal (PHCC) prices rose sharply in early 2026 after weather-related production disruptions and Cyclone Koji reduced supply. Prices reached around $250/mt in early February before easing to approximately $220/mt by the end of March. They recovered during April and remained around $240/mt in May, supported by higher diesel costs. Over the longer term, the report forecasts that metallurgical coal prices will remain broadly stable in real terms through 2031.
