BMI has lowered its 2025 price forecast for Australian coking coal to $200/t

BMI Country Risk and Industry Research analysts have revised their forecast for the average annual price of Australian coking coal for 2025, lowering it to $200/t from the previous $220/t. The main reasons for this decision were weak demand and low steel production growth, Kallanish reports.

According to the study, coking coal prices will continue to be under pressure due to the overall weakening of the US dollar-denominated commodity market. Experts also note that the election of Donald Trump as US president is expected to have a negative impact on the steel market due to new trade duties and supply chain disruptions.

In 2024, negative investor sentiment towards China’s construction sector has already led to a drop in demand for coking coal. Additional pressure will come from new US tariffs, which could worsen the situation for the steel industry and reduce consumption of raw materials.

According to BMI, the average coking coal price in 2024 was $197/t, and prices are likely to remain under pressure in 2025. The slowdown in steel production in importing countries, except for India, will limit demand for raw materials and thus restrain price growth.

On the supply side, experts note that coking coal production in Australia remains limited. In the long term, prices are expected to decline further amid a reduction in steel production in blast furnaces due to the transition to environmentally friendly technologies.

Nevertheless, BMI predicts that coking coal prices will remain high by historical standards in 2025-2029.

In its December review, the Australian Department of Industry, Science and Resources predicted that coking coal prices would average $211/t in FY2024/2025 (ending in June 2025) and $205/t in FY2025/2026.

In its quarterly report on resources and energy, the department notes that the coking coal price forecast is subject to high volatility, given the illiquidity of the market and the possibility of changes in steel trade flows depending on changes in geopolitical and trade policies.