South Asian coal demand supports stronger seaborne flows
June 15, 2026
In its latest metallurgical coal market update, McCloskey highlighted how developments in China drove sharp swings in both futures and physical markets, prompting renewed interest in seaborne supply and supporting higher prices for premium hard coking coal.
McCloskey reported that its assessment for low-volatile coal MCC1 rose by $3.60/t on the week to $243.00/t FOB Australia, while MCC4 increased by $18.15/t to $261.15/t CFR China. Market direction was heavily influenced by developments in China, where Dalian Commodity Exchange coking coal futures initially weakened before rebounding later in the week.
Early pressure came after participants interpreted comments from Shaanxi province on securing summer coal supply as a possible signal of broader coal output support. However, traders later noted that Shaanxi is mainly a thermal coal-producing province, while domestic prime hard low-volatile coking coal supply remained tight. As sentiment softened, offers became limited and traders adopted a wait-and-see approach rather than selling cargoes aggressively.
The market then regained momentum after participants shared reports of a mining accident at a premium low-volatile operation in Shanxi. Although no official confirmation had been issued at the time of reporting, the news increased Chinese interest in seaborne premium hard coking coal. Buyers were understood to favour on-the-water or nearby loading cargoes, reflecting concern over domestic availability and uncertainty around future production recovery.
In the secondary market, six Panamax cargoes of prime hard material were understood to be available, including premium low-volatile and premium mid-volatile brands for late-June and July loading. Chinese buyers were reportedly open to negotiations around $265.00/t CFR China for Australian material, though laycan timing remained a key factor.
Domestic Chinese prices also strengthened, with Shanxi Anze premium low-sulphur coal rising to RMB1,980/t ex-plant including VAT. Stricter safety inspections in parts of Shanxi supported broader price gains, while some East China steelmakers faced reduced deliveries of term-contracted coal and turned to spot supply.
At the same time, buying interest for second-tier coals was limited by futures corrections and continued strong Mongolian supply. In the Atlantic basin, demand remained mixed, with some interest from South America and China for Colombian mid-vol coal, while European prompt demand stayed subdued amid logistics constraints and weaker steel production.
Source: OPIS McCloskey Coal Report, 12 June 2026
