Mysteel: Global met coal exports to rise 6% by 2026

The estimated rise will mainly be driven by higher export volumes from Australia, where shipments are projected to climb up by 18.5% from 2023 levels to reach 179 mnt in 2026, the report says. If realised, Australia would account for a hefty 48.5% of all met coal exported worldwide that year, up from a share of 43.4% in 2023, Mysteel Global notes.

The report explains that new supply of metallurgical coal from Australia will likely outpace mine closures and suspensions through to 2026, with major coal developers such as Peabody Energy and Pembroke Resources expected to lift operations at some of their mines.

During Australia's next fiscal year ending June 2026, the country's coal output is predicted to reach 179 mnt, which would make for an increase of 18 mnt or 11.2% compared with the volume for the year to last June, DISR data show.

"A diverse customer base will likely keep buying demand relatively strong for Australian metallurgical coal through the forecast period," the report highlights. Besides India and Japan, currently the two largest buyers of Australian coal, countries such as Germany, Vietnam, the Netherlands, and Turkey have also sourced cargoes from the country, it says.

Moreover, India is expected to continue to drive international demand for the steelmaking material, in tandem with the steady expansion of blast furnace capacity to meet the country's production capacity goal of 300 mnt/year by 2030. Metallurgical coal imports by India may hit 87 mnt by 2026, equivalent to a 19.2% rise from 2023, the report says.

Additionally, India's scheme to add 30 million units to its national housing stock over the next five years will boost the country's steel demand.

However, China's demand for seaborne metallurgical coal may have peaked due to the fall in steel prices and negative margins for Chinese steelmakers, the report notes. The DISR has adjusted its import prediction for coking coal for China by 2026 to 54 mnt, down by 15.6% from 2023.

Other key global exporters of met coal, however, are expected to see limited increases in their shipping volumes during the years through 2026, the department says. The United States and Canada may log rises of only 7% and 3.4%, respectively, from their 2023 levels to reach 46 mnt and 30 mnt by 2026, respectively.

Russia, meanwhile, will likely see its annual metallurgical coal exports stay stable at 44 mnt over 2023-2026, with additional US sanctions against Russian coal producers and shippers still a downward risk for exports. With the EU banning Russian coal imports from August 2022 amid the Ukraine conflict, Russia's coal exporters have been heavily reliant on the Chinese and Indian markets, which together have a combined 95% share of Russia's export market, DISR says.

For Mongolia, its annual exports of metallurgical coal are expected to stabilise at 46 mnt through 2026 after dipping by an estimated 4.2% y-o-y to 44 mnt this year, the report forecasts.

The predicted decline in Mongolian exports reflects shrinking demand from China, the only buyer of its metallurgical coal, as Mysteel Global has reported. DISR notes that Mongolian met coal has the advantage of low freight costs but also has weaker market pricing power, while its metallurgical coal imports also attract a 3% import duty from China Customs.

Note:This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.