Global met coal market holds firm amid tight supply; Indian buyers resist higher prices

• Chinese demand firm on healthy steel margins, potential coke price hikes
  
  
• Softening steel prices, weaker rupee keep Indian steelmakers cautious
  
  

Global metallurgical coal, pulverised coal injection (PCI), and metallurgical coke markets remained broadly firm for the week ending May 15, 2026, supported by supply-side tightness in premium materials and improving coke sentiment in China. However, resistance from steelmakers -- particularly in India -- continued to limit aggressive upside as steel margins stayed under pressure and finished steel demand remained uneven.

While Australian premium hard coking coal (PHCC) prices remained stable, metallurgical coke markets strengthened, led by tightening Indonesian availability and firmer domestic Chinese coke values. PCI prices also showed resilience amid continued demand from blast furnace operators, although China's changing trade flows increasingly favoured Russian-origin cargoes.

Steel market conditions remained mixed. Chinese mills continued to maintain relatively healthy hot metal production levels, supporting raw material demand, while Indian steelmakers turned increasingly cautious amid weaker domestic steel prices, a sharply weaker rupee, and high raw material costs.

Premium hard coking coal stays supported despite thin liquidity

Premium low-volatility hard coking coal (PLV HCC) prices held steady at around $239.8/tonne (t) FOB Australia, while CFR China values remained near $221/t, reflecting a market balancing supply concerns against cautious steel demand.

Market activity remained relatively thin, though buying interest improved marginally for prompt Australian premium cargoes. Concerns over loading delays and tight availability of certain premium mid-vol cargoes continued to support market sentiment.

Australian premium brands largely held parity with benchmark values. Goonyella, Moranbah North, and Illawarra premiums continued trading slightly above benchmark-equivalent levels, signalling that buyers remained willing to pay for consistency and coke strength despite uncertain steel margins.

However, Indian buyers remained resistant to current pricing. Several steelmakers viewed prevailing coking coal values as increasingly difficult to absorb due to softer domestic steel realisations and currency depreciation. The Indian rupee's sharp fall against the US dollar has materially increased landed raw material costs, reducing appetite for spot cargoes.

Chinese steel activity prevents sharp downside

In China, metallurgical coal markets found support from continued blast furnace utilisation and expectations of stronger domestic coke prices.

Domestic Shanxi premium low-vol coking coal values strengthened to around RMB 1,620/t ($ 238/t) ex-washplant, while equivalent delivered Tangshan prices rose to approximately RMB 1,820/t, ($ 267/t) narrowing the discount between imported and domestic coal.

Imported premium low-vol coal into China continued trading at a modest premium to domestic Shanxi material, although the differential narrowed sharply from earlier levels. The reduced spread suggested improving competitiveness for domestic coal while limiting arbitrage opportunities for traders.

North China prompt port inventories of imported premium low-vol coal remained relatively steady, with Jingtang port stock values near RMB 1,690/t,($ 248/t) equivalent to around $214/t CFR.

The stability in Chinese steel production has prevented a meaningful correction in seaborne coking coal prices despite lingering concerns around downstream steel demand.

US metallurgical coal market mixed

The Atlantic metallurgical coal market remained mixed.

US East Coast low-vol hard coking coal held near $195/t FOB, while high-vol A coal softened to approximately $157/t FOB amid slower buying interest. High-vol B material traded near $149/t FOB.

Higher freight rates, particularly into South Asia, continued to affect the competitiveness of US-origin material. Shipping disruptions and elevated bunker costs linked to the ongoing Middle East conflict also added cost inflation across the supply chain.

PCI market remains stable as Russian supply gains share

The PCI market remained largely steady, supported by stable blast furnace utilisation and limited spot availability.

Low-vol PCI held around $156.4/t FOB Australia, while CFR China values rose marginally to $142.5/t. Mid-vol PCI stood near $151.4/t FOB Australia and $141/t CFR China.

China's PCI trade flows continued to evolve, with Russian-origin cargoes increasingly dominating spot imports into China, displacing Australian supply in several instances. This has gradually reshaped market benchmarks and pricing behaviour.

Domestic Chinese PCI values in Shanxi remained around RMB 980/t ex-washplant, translating to roughly $134/t CFR-equivalent China, providing steel mills with relatively cost-effective blast furnace injectants.

Metallurgical coke market firms on tight Indonesian supply

The metallurgical coke market strengthened this week, supported by tighter Indonesian availability and firmer domestic Chinese pricing.

Domestic Chinese coke values strengthened notably, with delivered North China prices rising to around RMB 1,620/t, ($ 238/t) equivalent to approximately $246/t FOB parity, signalling improved sentiment among coke producers.

Meanwhile, the Indonesian coke market tightened considerably.

A deal for a 50,000 t cargo of 65 CSR Indonesian metallurgical coke for July loading was concluded at $272/t FOB Indonesia, indicating stronger pricing momentum and limited cargo availability.

Producers were heard to be largely sold out for July loading, with only limited prompt volumes remaining in the market. Tight availability, coupled with rising freight costs into India, continued to support CFR India values. Several market participants indicated that subsequent Indonesian coke transactions could conclude above the latest benchmark deal, particularly for material with a higher coke strength ratio (CSR).

Steel market conditions continue to shape raw material appetite

Underlying steel market fundamentals remained the key determinant for ferrous raw materials demand.

Chinese steel margins remained relatively healthy, supporting elevated hot metal production and maintaining demand for premium coking coal and PCI. Expectations of stronger domestic coke prices also encouraged mills to maintain procurement levels.

In contrast, Indian steelmakers remained more cautious.

Domestic steel prices softened in recent weeks while imported raw material costs increased due to rupee depreciation and elevated freight costs. Several Indian buyers were heard delaying purchases or preferring shorter-term coverage amid uncertainty over finished steel demand recovery.

At the same time, elevated freight rates continued to influence buying behaviour. Freights from Australia to India remained above $26/t for Panamax vessels, while US East Coast to India routes continued above $51/t, limiting competitiveness for several Atlantic cargoes.

Near-term direction

The global metallurgical coal and coke complex is likely to remain supported in the near term, driven by tight premium supply, firm Chinese steel output, and strengthening coke fundamentals.

However, upside may remain capped by weak steel margins outside China, Indian buyer resistance, and continued uncertainty over downstream steel demand. Metallurgical coke -- particularly Indonesian material -- may continue to outperform coking coal if supply tightness persists into July-loading cargoes.