Australia lowers forecast for coking coal exports for FY2024/2025

Australia has cut its forecast for coking coal exports for the 2024/2025 fiscal year (ending in June 2025) to 161 million tons amid a decline in production of this raw material. This is stated in a report by the country’s Department of Industry, Science and Resources.

In the previous, June forecast of the department, the expected export volume for the period was 172 million tons.

In 2025/2026, coking coal supplies abroad are expected to increase to 175 million tons.

The Department notes that the production of this raw material in the country has been negatively affected by a number of events. The department refers to incidents at the Broadmeadow East (Bowen Coking Coal), Byerwen (QCoal) and Bowen Basin Grosvenor (Anglo American) mines. After an underground fire at its mine in June this year, Anglo American lowered its metallurgical division’s production forecast for the second half of 2024 by 1-1.5 million tons.

As noted, India and Japan remain the key export destinations for Australian coking coal. At the same time, shipments are relatively stable for both countries.

Demand for this raw material is expected to remain relatively high over the forecast period due to a diverse customer base and premium supply.

According to the department, coking coal prices fell from $233/t at the beginning of July this year to $195/t at the end of August. Prices are expected to average $200/t by 2026. Significant price fluctuations are expected throughout the forecast period.

On the supply side, volatility is expected due to illiquidity and concentration of supply in the Australian spot market. La Niña weather conditions in Queensland and New South Wales could also disrupt mine operations.

On the demand side, opportunistic demand from China and India on the spot market is forecast to continue as buyers seek to maximize profits by purchasing Australian coal when prices plus freight are lower than domestic prices. Domestic coking coal production and consumption in China is likely to remain volatile, with additional consumption likely to be triggered by government demand stimulus. Demand for high-quality coking coal in India should remain high.

Australia is forecasting a decline in ore export revenues over the next two years. The benchmark price for iron ore is expected to reach $92/t in 2024, $80/t in 2025 and around $76/t in 2026.