Australia's met coal exports forecast to rise until 2027
India diversifying met coal imports away from Australia
Global met coal demand expected to decline gradually by 2030
Australia's world-leading metallurgical coal exports are forecast to rise over the next two years before declining by 2030, while demand is expected to fall slightly, according to a new government analysis.
Producers in Queensland, the source of most of Australia's met coal exports, are under pressure from low commodity prices, high costs and a burdensome royalty regime. At the same time, demand is declining from China-based steelmakers and India is working to diversify its coal supply purchases.
Despite these factors, Australia's exports are forecast to rise from 147 million metric tons in fiscal 2025 to an estimated 152 million mt in fiscal 2026, then 160 million mt in fiscal 2027, according to the federal government's December Resources and Energy Quarterly report released Dec. 19.
"Our coal industry is pretty resilient," Janette Hewson, CEO of the Queensland Resources Council, told Platts, part of S&P Global Energy. "They're very good at trying to manage their costs. I've seen a lot of that cost discipline this year from our members."
Queensland producer Whitehaven Coal Ltd. is planning for growth, announcing Dec. 15 that recoverable reserves at the Blackwater mine have risen 91% to 365 million mt. The expansion unlocks future mining areas to support continued long-term production, the miner said. Whitehaven acquired the Blackwater property from BHP Group Ltd. in 2024.
The International Energy Agency (IEA) also expects Australia's met coal exports to increase, from 149 million mt in 2025 to 155 million mt in 2027, before declining to 152 million mt in 2030, below the 154 million mt seen in 2024, according to its Coal 2025 report issued Dec. 17.
"Metallurgical coal exporters, led by Australia, appear to have the stronger prospects due to the relatively robust demand outlook in India," the IEA said.
India diversifying
India has long been seen as the future destination for demand growth in Australia's met coal industry, with some industry observers suggesting that China's steelmaking output and demand have already peaked.
"Indian imports were strong during the [recent] quarter, with combined coking coal and [pulverized-coal-injection coal] imports reaching a record high of over 8 million mt in the month of September," the Australian government's report said.
However, the uncertainty in Queensland has led India's steelmakers to look elsewhere.
Australia's exports are facing the reality that India is diversifying met coal imports away from Australia, while China lowers steel production, Sylvia Cao, a principal analyst covering metallurgical coal at S&P Global Energy, said in an interview.
"In response to tepid market conditions and high steel inventories [in China], mills have started to trim crude steel production," S&P Global Energy analysts said in a Nov. 18 report on steel. "October's crude steel production fell to its lowest level since December 2023, according to National Bureau of Statistics of China data."
"I've had Indian steel industry [stakeholders] saying things like, 'We're also looking at what's available in Mozambique' and places like that. So they're trying to diversify as a fallback; where else can they get what they need," Hewson said. The executive attended a trade delegation to India and Japan in September.
While the Queensland government is firm about not changing its royalty regime, it is releasing more exploration tenements for expressions of interest in coal. Hewson said there is still much untapped, albeit mainly brownfields, potential in coal.
Declining demand
The IEA expects global met coal consumption to "decline gradually" to 1.06 billion metric tons by 2030, from 1.11 billion metric tons in 2025, reflecting "structural changes in steelmaking and slower growth in industrial activity."
"The most pronounced reductions are expected in China," which accounts for 67% of global met coal demand, the IEA said. China's demand could fall by 77 million mt by 2030, offsetting increases of 26 million mt in India and 12 million mt in Indonesia.
"Overall, global met coal demand is set to decline by 53 million mt between 2025 and 2030, underscoring the gradual transition in steelmaking technologies and regional economic dynamics," the IEA said.
"Meanwhile, advanced economies such as Japan, Korea and the European Union are forecast to see declines, reflecting subdued steel output and a lower share of steel produced through the blast furnace-basic oxygen furnace route," the IEA said.
Price pressures
The Australian government's quarterly analysis showed China's recent mine safety inspections and restrictions on coal mining have been "putting upward pressure on prices" and that prices have continued to rise through the December quarter to date.
"Premium low-volatile hard coking coal (PLV HCC) CFR China prices peaked at $211/mt on Oct. 30, driven by expectations of winter supply tightness and supportive macroeconomic factors, before gradually declining," S&P Global Energy analysts wrote in a Nov. 28 report on met coal. The price is forecast to average $186/mt in 2026 and $189/t in 2027.
Platts assessed the PLV HCC CFR China price at $206/mt on Dec. 18, steady from a year prior.