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Asian Q1 met coal outlook cautious amid India’s coke import quota, Trump’s tariff uncertainties

This report is part of the S&P Global Commodity Insights’ Metals Trade Review series, where we dig through datasets and digest some of the key trends in iron ore, metallurgical coal, copper, alumina, cobalt, lithium, nickel and steel and scrap. We also explore what the next few months could bring, from supply and demand shifts to new arbitrages, and to quality spread fluctuations.

The Asian seaborne metallurgical coal market is expected to remain cautious in Q1, with participants adopting a wait-and-watch approach amid uncertainties surrounding India’s new import quotas on metallurgical coke and the US trade policies under the new US President Donald Trump.
Prices of Australian prime hard coking coal (PHCC) are expected to remain rangebound into Q1 amid uncertainties arising from India’s barriers to coke imports, and upcoming policies and economic directions in the US, China, and India.

The benchmark Platts premium low-volatile (PLV) hard coking coal index ended Q4 2024 at $196.5/mt FOB Australia, down $8.25/mt from the end of Q3. The PLV CFR China index fell $14/mt over the same period to $198/mt, according to S&P Global Commodity Insights data.

Uncertainty looms over Indonesia’s coke production
India, being a major metallurgical coal and coke consumer, implemented volume-based quotas against imports of low ash coke varying by country from January-June 2025, S&P Global Commodity Insights reported on Dec. 26.

India’s move against coke imports has cast uncertainties over the region, especially regarding the adaptability of Indonesian coke producers reliant on exports, with India being their largest buyer in 2024.

Indonesian producers expressed concerns about exports to India being crippled by the limit of 66,364 mt over January-June, prompting some to initiate production cuts shortly after the quota restrictions were announced.

“We want to produce less and thus keep sales pace steady,” said one Indonesian supplier.

Meanwhile, producers are exploring alternative markets, observing that a potential recovery in demand could lead them to increase production in the future.

Yet some sources believed that Indonesian coke producers would have to eventually reduce output further, as other destinations are not able to fill the demand gap or consume as much coke as India.

Over January-November 2024, Indonesia’s coke exports to India surpassed 2.2 million mt, accounting for 46% of the country’s total exports over the period, according to the latest data from S&P Global Market Intelligence’s Global Trade Analytics Suite.

Though there were expectations that India would have to produce more of its coke domestically to meet its needs, traders there were cautious given the current lackluster state of its steel market.

“Even if the [Indian coke] quota is strictly enforced, we expect to see only 3-4 shipments of coking coal coming into India, and while it would support prices, we expect no bounce back [in price levels],” an Indian steelmaker source said, adding that a safeguard duty on steel imports to India would be more impactful in lifting steel prices.

Due to a glut of steel imports and insufficient government spending to boost steel consumption, hopes of a bump in demand, during the traditional Indian peak steel consumption period of January-March, have diminished.

Market participants also pointed to the country’s Federal Budget for FY 2025-26, due to be announced on Feb. 1, as it would set the tone ahead in terms of steel consumption and the pace of expansions by the country’s major steelmakers.

Trump 2.0 and US tariffs
The large-scale tariff hikes that Trump has said he would put in place have also kept the coking coal market on tenterhooks.

If the threats to impose tariffs on China materialize, retaliatory actions could disrupt the current flow of US coals to China, market sources said.

Even before Trump’s inauguration on Jan. 20, US met coal sellers were already facing tougher sales to China. “Some buyers requested us to bear the additional costs should the US raises tariff and China retaliates,” a Chinese trader said.

The US supplied close to 9.7 million mt of coking coal to China in the first 11 months of 2024.

For China, that is just a drop in the ocean, “but those US cargoes will have to find alternative markets,” an international trader said. “Some were already trying to push more volumes into India or Southeast Asia in January.”

Beijing’s Two Sessions to set the tone
Beijing’s annual Two Sessions, starting March 5, was another event that the market was anticipating, as it could provide clues as to how it would manage its relations with the US and additional steps to shore up the domestic economy.

“We may see speculative demand of coal picking up on such expectations. Though most likely it will dissipate quickly due to ample domestic coal supply and port side stocks currently,” a Chinese steelmaker said.

China’s metallurgical coal imports rose 22.5% on the year to 111.5 million mt over January-November 2024, with 47% sourced from Mongolia, followed by Russia (25%) and the US (9%).

Australian coal exports to China, meanwhile, grew over 280% in the same period to 8.8 million mt, making it the fourth largest supplier. “Australian coals could gain more market share if US imports decline,” a Chinese steelmaker noted.
Another Southeast Asian source expected that China might not be able to immediately remedy its property market challenges, but was hoping for it to put in place measures that would eventually improve steel demand.

“Chinese steel will continue to be exported and affect everyone if they don’t put in place measures to improve the situation,” he said. “Steel producers in Japan, South Korea, Vietnam, and India, are all weighed down by this. How can coal prices be strongly supported, or see any long-term uptick, without demand?”
Source: Platts

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