- Mongolian coking coal imports may surge on higher rail capacity
- China’s domestic supply remains key driver of import demand
China’s coking coal imports from Mongolia — its largest supplier — are expected to surge to 82-95 million tonnes by 2027, representing robust growth of 41.7-58.3% from the 2025 level, according to Mysteel’s latest forecast report.
The growth will be driven largely by expanded capacity on major rail routes in Mongolia, such as the Gashuunsukhait-Ganqimaodu railway — currently under construction — and the Shiveekhuren-Ceke line, where construction has stalled due to a lack of funding.
The above estimate is based on a neutral scenario assuming the Gashuunsukhait-Ganqimaodu cross-border railway — a key driver for Mongolian coal exports in 2027 – starts operations as scheduled next year and gradually ramps up capacity, while China’s domestic supply remains constrained.
For this year, China’s intakes of Mongolian coking coal are estimated to reach 82.58-84.38 million tonnes, with 40.58 million tonnes already imported in H1 and monthly average for H2 estimated at around 7-7.3 million tonnes. The 2026 total will mark a substantial jump of 37-40% on a yearly basis.
Two other projections for 2027 reflect pessimistic and optimistic scenarios respectively. If the commissioning of the Gashuunsukhait-Ganqimaodu rail line is delayed to 2028 — coinciding with a potentially narrower domestic supply shortage in China — coal imports from Mongolia could plateau at 75-80 million tonnes in 2027.
In contrast, the optimistic scenario sees imports soaring to 100-110 million tonnes in 2027, assuming the three cross-border rail links to Ganqimaodu, Ceke and Mandula unlock capacity swiftly, port handling reaches 60-70% of design levels, and Chinese buyers remain eager for more cargoes.
“While railway infrastructure and port capacity will decide the upper limit of Mongolian coal availability, the actual import volume will still hinge on China’s buying demand, largely defined by the magnitude of its domestic coal shortages,” the report points out.
Relaxed domestic safety curbs and a fast rebound in coal production could reduce China’s import interest, steering its imports of Mongolian coal to the lower end of the range. Should production cuts continue and the supply shortfall deepen, however, imports could edge toward the upper end.
Major railways to boost coal logistics
The 32.6-km Gashuunsukhait-Ganqimaodu railway is scheduled to start commercial operations in 2027, with coal transport capacity estimated at around 30 million tonnes/year. The rail line, funded by the country’s leading producer Erdenes Tavan Tolgoi (ETT) JSC, has completed 35% of construction by early July and entered the track-laying phase on September 1. All girder erection work is expected to be completed by October, with the entire track-laying to be finished before the end of this year. Ganqimaodu handles over half of China’s total coal imports from Mongolia, Mysteel notes.
The Shiveekhuren-Ceke line, however, remains in limbo due to lack of funds. The railway is expected to lift cross-border throughput to 30-35 million tonnes, a significant jump from the 10–18 million tonnes achievable when trucking was the primary logistics mode.
Similarly, the Khangi-Mandula cross-border line remains stalled, awaiting both government approvals and funding, even though both countries are keen to move forward. The connecting domestic rail segments are already in place, with Mongolia’s Züünbayan-Khangi line — in operation since November 2022 – already handles 15 million tonnes of coal per year.
Should all three major railways commence operations and reach full capacity, they would collectively add roughly 75-80 million tonnes per year in coal transport capacity, on top of existing trucking and AGV capabilities.
Uncertainties remain
Despite the increased rail capacity, the cross-border coal throughput still faces two main constraints: first, seasonal factors, such as reduced port activity during the Nadaam Festival in July and the impact of winter snowfall on road transport; and second, monthly port-handling capacity.
In the first half of 2026, monthly Mongolian coal throughput peaked at approximately 7.6-7.7 million tonnes, already approaching the upper limit of the current transport system. Even after new railways are completed and commissioned, they will require equipment commissioning, cross-border coordination, and a gradual ramp-up in volumes, meaning that full-capacity operation cannot be achieved overnight.
Meanwhile, the actual commissioning timeline remains uncertain. Cross-border railway projects involve far more than just track-laying; they also require resolution of gauge alignment between the two countries, port facility upgrades, transshipment and loading/unloading integration, and customs clearance system improvements. Past China-Mongolia rail projects have seen multiple delays, and even if completed on schedule, rail capacity will still be released gradually.
On the cost side, rail freight rates are generally lower than road transport. As rail’s share of the transport mix rises, the short-haul transfer and road-haulage components of Mongolian coal’s delivered cost should decline, potentially broadening its price advantage over both domestic Chinese coal and other import sources.
On the volume side, rail enables large-batch, continuous shipments, which could push monthly throughput of Mongolian coal beyond current peaks. In other words, if a domestic supply shortfall emerges, Mongolia would be better placed to accelerate shipments, strengthening its supply-response capability.
Mongolian supply increase potential
Mongolian coal production in 2025 broke through a key threshold of 100 million tonnes, supporting its strong exports reaching 90.02 million tonnes — basically all to China — including 64.17 million tonnes of coking coal (71.3% of total), 25.44 million tonnes of thermal coal and 410,000 tonnes of anthracite, according to Mongolia’s official data.
By setting a steady export goal of 90 million tonnes for 2026, basically flat from the previous year, Mongolia aims to keep its export scale at a steady level before a larger stride to near 95 million tonnes in 2027 and even over 100 million tonnes in the long run.
Leading coking coal producer ETT contributes one third of Mongolia’s total coal exports. The company plans to increase its annual export capacity by 20-40 million tonnes through ongoing development of Borteeg, Onchkharaat and Bortolgoi deposits and construction of corresponding roads and railways.
While Mongolian coal can influence marginal shifts in China’s domestic coking coal market, it lacks the capacity to set the price benchmark independently, Mysteel’s report points out.
When the Chinese coal market deviates from its supply-demand balance, Mongolian coal throughput tends to adjust more visibly, thereby supplementing domestic supply and easing shortfalls. However, China’s industry policies, mine production levels, and broader supply-side dynamics exert a greater influence over both the direction of price movements and the persistence of their upswings and downswings.
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