Premium hard coking coal prices rise on supply tightness as Asia scrambles for May’26 cargoes

• Supply tightness supports met coal prices
• Strong Chinese demand contrasts with cautious Indian buying

The global metallurgical coal and coke markets closed the week on a firmly bullish note, driven by supply constraints, robust Asian demand, and escalating geopolitical tensions. Premium hard coking coal (PHCC) prices continued their upward trajectory, while the Atlantic market faced increasing pressure from the thermal coal crossover phenomenon.

Supply-side dynamics

Australia faced tightening availability of premium mid-vol North Goonyella coal for May laycan. A bid on global COAL at $226/t FOB underscored the tightness. Traders reported increased buying interest amid shipment delays and a persistently bullish outlook. Premium low-vol FOB Australia rose to $225/mt, with tradable levels at $224-228/mt. The SGX Q2’26 met coal contract gained 70 cents to $236/t.

China domestic coking coal prices remained resilient, with miners’ inventories “not high.” The Anze mine in Shanxi raised offers by RMB 50/mt to RMB 1,500/mt ex-washplant. Steel mills are expected to ramp up production, supporting coking coal demand. Market sources anticipate further price increases, with cokeries likely to push through coke price hikes.

The Atlantic market faced a unique pressure: the thermal coal crossover. With USEC thermal coal at $87/mt and USGC at $90.50/mt, semi-soft coking coal and high-vol B brands are most vulnerable to diversion. Producer breakevens at $130-140/mt highlight tight margins. A UK-based trader warned producers “will simply leave coal in the ground to stay afloat” if FOB levels cannot be sustained.

Russian production fell 7% y-o-y in February, with even the “new coal regions” reporting declines.

Demand-side dynamics

India remained price-sensitive. Spot demand from non-integrated mills is expected to shrink as long-term contracts take effect from April.

China domestic demand remained robust, with steel production increases expected to support coking coal consumption. The 65/63 CSR coke indicative offer held steady at $233/mt FOB for May loading.

Japan and South Korea demand was steady but unremarkable, with no fresh transactions heard.

Freight and geopolitical impact

The Middle East conflict continued to ripple through markets. Australia-China Panamax freight at $24.25/mt, US-India at $46.50/mt. Delayed North Goonyella cargoes are expected to arrive in India late April/May, potentially pressuring the market later if demand does not materialize.

Outlook

Premium hard coking coal prices are expected to remain supported, with $225-230/mt FOB Australia as a new plateau. Delayed North Goonyella cargoes may provide some relief later in Q2, but sustained Chinese demand and the thermal crossover threat suggest limited downside.

The Atlantic market faces a more challenging outlook. European spot demand is muted, and producers are increasingly focused on Asia for incremental volumes. Production cuts may eventually rebalance the market, but in the near term, US exporters will continue to prioritize the stronger Asian market.

Key factors to watch: May-loading cargo availability from Australia; Chinese coke price negotiations; Atlantic thermal crossover dynamics; and freight cost developments amid ongoing geopolitical tensions.