Posted on 30 May 2025
The coking coal market outlook is cautious amid China's potential steel production cuts and US trade tariffs, industry experts noted at a Singapore coking coal conference attended by Kallanish.
"If China is going to cut 20-50 million tonnes of steel output in 2025, it will have a huge impact on steel consumption and raw material prices," says Stone Lin Yankai, physical trade director, Majestic Rock Resources. He believes domestic coal miners may struggle to survive under those conditions.
According to him, Chinese consumption remains the key driver of the market outlook. However, current steel prices in China are weak. He adds that even without US tariffs, domestic coking coal prices in China were already under pressure. He also notes that for the fourth quarter of 2024, most steel mills in China are facing losses, but they are still producing due to cashflow issues.
Ted O’Brien, managing partner and chief commercial officer at Oluma Resources, also says that China is a key buyer for US coal, and if China is out of the market amid US tariffs this will have a negative impact on US coal suppliers. He also notes that the market is currently facing oversupply amid weak demand. These US coal suppliers are fighting for any small spot opportunity in Southeast Asia or India.
Although Australian coking coal prices have remained below $220/tonne (a key cost level for many Australian miners) in recent months, Myles Perrin, Vice President of Trading and Marketing at Square Resources, opines that the bearish outlook from China has had less impact on the Australian coal market than on the US market, largely due to limited Australian supply.
Source:Kallanish
