Global Coking Coal Prices Fall as Steel Demand Weakens
Global coking coal prices weakened in early November as subdued steelmaker demand, softer seaborne buying and expectations of improving mine supply put pressure on both Australian and Chinese markets.
- Premium hard coking coal FOB Australia fell to $262.6/t on November 6, down 2.4% from October 30.
- China's Anze coking coal spot price fell to $334.4/t EXW, down 2.3% week over week.
- Australian seaborne demand remained weak amid unsold cargoes and softer Indian buying.
- Chinese steelmakers reduced raw-material purchasing as hot-metal output and profitability weakened.
- Mysteel expects Chinese coking coal prices to remain under pressure in November as mine supply recovers.
MONTREAL (SteelPrices): Coking coal prices weakened in both Australia and China in early November as demand from steelmakers softened and supply concerns eased.
Premium hard coking coal FOB Australia stood at $262.6 per tonne on November 6, down 2.4% from October 30, according to Kallanish data cited by GMK Center.
Mysteel separately reported a November 6 transaction for Peak Downs premium hard coking coal at $262.2/t FOB, providing additional support for the market level.
In China, spot coking coal in Anze was reported at $334.4/t EXW on November 6, down 2.3% from the previous week.
Australian Seaborne Coal Faces Weak Buying
The Australian seaborne market weakened at the start of November as buying interest remained limited and unsold cargoes accumulated.
The market was also affected by holidays in India, one of the world's largest importers of metallurgical coal.
At the end of October, some cargoes were reportedly being negotiated rather than sold at firm fixed offers, reflecting weaker buyer confidence.
Mysteel's November 6 market report described imported coking coal as weak, with Australian first-tier hard coking coal around $284/t CFR China and a Peak Downs transaction at $262.2/t FOB.
China's Domestic Market Remains Under Pressure
China's domestic coking coal market also continued to weaken in early November.
Lower hot-metal production reduced steelmakers' need for raw materials, while weak steelmaking margins kept buyers focused on immediate requirements rather than aggressive restocking.
At the same time, some coal mines in Shanxi that had completed monthly production plans or undergone maintenance began gradually resuming operations.
Chinese authorities have also encouraged faster restarts at mines that were previously suspended, with the goal of ensuring adequate coal supply heading into winter.
The pace of that recovery remains uncertain, but expectations of higher mine output are reducing some of the supply-risk premium that supported prices earlier in the year.
Why Falling Coking Coal Matters for Steel Prices
Coking coal is one of the largest cost inputs for blast-furnace steelmakers. When coal prices fall, the cost of making steel can also ease.
- Premium hard coking coal FOB Australia: $262.6/t
- Weekly change: -2.4%
- China Anze spot: $334.4/t EXW
- Weekly change: -2.3%
- Market direction: weaker demand and improving supply expectations
Lower coal costs can improve mill margins, but they can also weaken the cost floor supporting finished-steel prices.
That is especially relevant in China, where HRC prices are already under pressure from elevated inventories, softer manufacturing demand and recovering production.
Coke Producers Remain Cautious
Chinese coke producers remained cautious about buying additional coking coal after an unsuccessful attempt to raise coke prices at the end of October.
Mysteel reported that steelmakers were pushing for further coke price reductions in November.
By November 11, Mysteel said a third round of coke price cuts had begun, with reductions of around Yuan 50–55/t expected.
Lower coke prices can feed back into weaker demand for coking coal because coke producers have less incentive to build expensive raw-material inventories.
Winter Restocking Could Still Change the Market
The market is not one-sided.
Steel mills and coke producers generally keep inventories relatively lean when prices are falling, but winter weather can disrupt rail and road transportation in northern China.
That creates a possibility that buyers may begin restocking later in November if they become concerned about logistics or mine supply.
Mysteel said the timing and scale of winter restocking, together with the pace of mine restarts, will be important factors determining the next move in Chinese coking coal prices.
Futures and Spot Markets Are Not Moving Identically
China's physical coking coal market remained weak in early November, even as futures periodically showed firmer performance.
This distinction matters because futures prices reflect expectations about future supply and demand, while spot prices show what physical material is currently changing hands for.
The difference suggests that some traders expect conditions to improve later, even though immediate physical demand remains subdued.
Also Read
- Global Coking Coal Prices Remain Dependent on China
- China HRC Prices Face Further Pressure in November
November Outlook Remains Soft
Mysteel expects China's coking coal market to remain under pressure during November as domestic supply continues recovering and demand from steelmakers remains weak.
Recent market data support that view. On November 10 and 11, Mysteel continued to report weak domestic coking coal trading, lower hot-metal production and cautious purchasing from steel and coke producers.
However, the outlook is not a guarantee of further uninterrupted declines.
Mine disruptions, winter logistics, stronger steel output or faster-than-expected restocking could tighten the market again.
For now, the balance remains softer than it was earlier in the autumn, with Australian seaborne coal and Chinese domestic material both below late-October levels.
Courtesy: GMK Center
