- Prices to rise 2%, upside capped by surplus, policy uncertainty
- Govt may ease anti-involution policy to stabilise economic growth
Mysteel Global: The Chinese coking coal market is expected to undergo a new phase of rebalancing in 2026, shaped by both supportive and restrictive policy impacts. While these mixed forces are anticipated to drive up coking coal prices, a persistent uptrend is unlikely to be seen this year due to the persistent capacity surplus of the feed coal and uncertainty in downstream demand, Mysteel’s latest annual report on the commodity predicts.
According to Mysteel’s estimates, the price anchor of the leading brand Anze low-sulphur primary coking coal extracted in North China’s Shanxi province may stand between RMB 1,400-1,450/tonne (t) ($201-208/t) exw with VAT this year, marking a mild rise of around 2% on year. The highest level for the grade could rise to RMB 1,800/t within the year, the report elaborates.
Specifically, price movements in 2026 are expected to follow three phases: continued pressure in the first quarter due to sluggish demand; a modest rebound in the second quarter as construction activity resumes in spring; and a period of frequent volatility in the second half of the year amid mixed policy effects, per the report.
Two key policies targeting coal and steel sectors are anticipated to exert opposite impacts on China’s coking coal market this year, the report points out. Firstly, the country’s anti-involution policy for the coal sector to curb overproduction may see periodic easing in 2026, particularly as authorities seek to stabilise economic growth. This will likely lead to a growing supply surplus and cap upward strengths for coking coal prices.
In 2025, this policy — reflected in stricter constraints in producing beyond the licensed capacities and tighter safety checks — dampened overproduction across the coal industry and helped normalise output discipline, particularly among small- and medium-sized coal mines. These measures played a key role in reversing prolonged price declines in the first half of last year, driving coking coal prices sharply higher from July and providing continuous support to the prices with evolving expectations around the policy.
Secondly, China reintroduced export licensing for selected steel exports in mid-December last year, a policy that is expected to affect overseas steel demand, therefore curbing the resilience of domestic coking coal consumption, Mysteel’s annual report notes.
The past 2025 witnessed thriving steel exports, which had partly elevated domestic hot metal production and kept feed coal demand afloat. New data from the General Administration of Customs (GACC) show that China’s finished steel exports in 2025 set a new all-time high of 119.02 million tonnes, higher by 7.5% from 2024.
In parallel, Mysteel’s survey on the 247 Chinese blast-furnace mills showed that their monthly hot metal output averaged 71.98 million tonnes last year, rising by 2.7% from the year-ago level.
The intensity of these policies will remain a key variable for coking coal market developments in 2026, with market fluctuations likely to be observed amid dynamic effect shifts of policy measures, Mysteel’s report highlights.
The coal-coke-steel industry chain is currently stuck at an impasse where profit squeeze from both the upstream and downstream sectors intensifies. On the one hand, coal miners are struggling to stabilise prices at the break-even levels, with their estimated profits narrowing to RMB 200-800/t for premium grades and ranging from a loss of RMB 100/t to a gain of RMB 400/t for blending coal.
On the other hand, soft steel prices and high production costs have squeezed margins for steelmakers as well. This pressure has been constantly passed to the coke market, where the capacity surplus continues to bite even with a planned capacity elimination of around 27.55 million tonnes (mnt)/year in 2026.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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