Australian Coking Coal Prices Surge 25 Percent

Premium Australian freight on board coking coal prices surged 25 percent during the first seven months of 2026. This price spike has created significant margin pressure for Indian steelmakers, who import up to 95 percent of their metallurgical coal and cannot raise steel prices due to intense competition from China.

BHP attributed the tightening seaborne market to strong Indian import demand and various supply disruptions. These disruptions include a slower ramp-up of new mines, conflict in Iran, and supply issues within Australia. A deadly mine explosion in Shanxi, China, which killed over 80 people, further constrained global availability.

Despite these cost pressures, India expanded its steelmaking capacity to 220 Mtpa in the 2026 financial year as part of a long-term goal to reach 500 Mtpa by 2047. Industry executives warn that raw material costs will remain elevated through the second half of the year.