Posted on 12 Dec 2025
Macquarie is anticipating that the global coking coal market will be oversupplied next year, driven by reduced steel production and weakening import demand, even as short-term risks threaten to trigger sharp price spikes, Kallanish notes.
“Our balance continues to indicate an oversupplied market next year, with lower steel production leading to reduced imports and seaborne volumes further pressured by slightly higher Mongolian supply,” the bank states in a note.
Despite the long-term bearish outlook, the bank notes that the first quarter of the year retains its usual seasonal upside risks, primarily due to potential weather-related disruptions.
According to Macquarie, cyclones or an unusually wet season could curtail Australian exports.
Recent above-average rainfall in Queensland has already led to a temporary slowdown in output and logistics. Given the inelastic nature of coking coal supply, such disruptions could trigger sharp, sudden price increases, it adds.
Looking ahead to 2026, Macquarie expects global coking coal production rates to remain broadly in line with this year. However, the first half is likely to be lower year-on-year due to a high comparison base before recovering in the latter half.
Domestically, China has seen a significant reduction in output, primarily in Inner Mongolia — the country’s second-largest coking coal producer. Year-to-date production in the province is down 8.9%.
This decline followed stringent safety inspection teams uncovering widespread non-compliance, with 93 out of 299 operating mines found to have exceeded government-mandated production limits in 2024. This drop in domestic supply led to a drawdown in mine stocks, which only began to recover in mid-November as production normalised.
Source:Kallanish
