- China demand, restocking, and freight rise drive market momentum
- Supply tightness and firm offers support stronger Q2 price outlook
The Asian thermal coal market ended March on a firm note, with prices across key benchmarks recording gains in the final week after a month characterized by cautious trading and fragmented demand. The market’s trajectory shifted notably in the last seven days, driven by a combination of restocking activity, rising domestic prices in China, and persistent supply-side constraints.
Prices at a glance (Week ended 27 March, 2026)
What happened in March?
March unfolded as a tale of two distinct periods. The first half of the month saw a market struggling for direction. In Australia, high-energy coal (6,000 kc NAR) faced a widening gap between buyers and sellers, with offers rising to $146/t while bids remained capped below $137/t. Trading activity was sparse, and the market appeared directionless.
The turning point came in the week ending March 20. Confirmed trades for Australian 6,000 kcal NAR coal at $140/t for May and June loading reset market expectations. This momentum carried into the final week, where multiple trades for May loading were reported at $133.50/t and $135.00/t, establishing a clear price floor. Offers for June cargoes tested $148/t, signaling sustained seller confidence.
Indonesian low-rank coal (3,800 kcal NAR) followed a similar upward trajectory. After weeks of unconfirmed activity and wide offer spreads, a confirmed trade at $61.00/t for April loading in the final week provided a clear benchmark, with bids and offers subsequently clustering in a narrower $57.50-62.00/t range.
The Chinese domestic market, as reflected by the Qinhuangdao (QHD) FOB markers, delivered the clearest signal of strengthening conditions. After a period of relative stability, all tracked energy grades surged in the final week. The 5,000 kcal NAR marker jumped nearly 5% w-o-w to $98.45/t, while the 6,000 kc NAR marker climbed to $126.57/t.
Demand finds its footing
Several factors converged to lift the market. In China, warmer-than-usual weather in the south accelerated coal consumption at power plants, leading to faster inventory drawdowns. This prompted buyers to gradually accept higher prices for Indonesian cargoes, with tender offers for 3,800 kcal NAR coal rising steadily from the RMB 518-568/t range in early March to a firm RMB 550-560/t range by month-end. The extension of loading periods into April and May in final-week tenders indicated growing confidence in sustained demand.
The Australian market benefited from end-user restocking needs after weeks of hesitation. The shift was particularly evident in the mid-energy segment (5,500 kcal NAR), where a two-tiered market-with restricted cargoes to China trading at steep discounts-narrowed significantly by month-end as general sentiment improved.
Rising coastal freight rates in China added another layer of support. The cost to ship from Qinhuangdao to Shanghai more than doubled over March to $5.79/t, while freight to Guangzhou rose to $8.65/t. These higher logistics costs underpinned delivered prices and encouraged buyers to secure cargoes earlier rather than later.
On the supply side, Indonesian producers awaited final government approval of annual RKAB production quotas, creating some uncertainty about near-term availability. Sellers maintained firm offers, particularly for mid- to high-CV cargoes, which remained in tight supply.
Outlook
The late-month momentum suggests the Asian thermal coal market is positioned for a firmer opening to the second quarter. The sharp rally in Chinese domestic prices, coupled with extended forward coverage by buyers, points to expectations of tighter supply conditions ahead of the summer demand season.
For Australian high-energy coal, the market appears to have found a new equilibrium in the mid-$130s to low-$140s range, supported by sustained restocking needs. Indonesian low-rank coal, having established a clear floor near $61/t for April loading, may see further gains if Chinese buying interest continues to firm.
However, risks remain. Geopolitical tensions and freight volatility continue to inject uncertainty into the market. Indian buyers, a key source of demand, have remained largely on the sidelines, relying on domestic inventories and waiting for clearer price signals. Whether they re-enter the market in force will be a critical factor in sustaining the recent upward trend.
Overall, the market that entered March with caution and fragmentation has emerged with renewed clarity and direction. The coming weeks will test whether this late-month momentum can translate into sustained strength through April.
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