MYSTEEL: China's coking coal market to see mild recovery in 2026

The Chinese coking coal market is expected to undergo a new phase of rebalancing in 2026, shaped by both supportive and restrictive policy impacts. While these mixed forces are anticipated to drive up coking coal prices, a persistent uptrend is unlikely to be seen this year due to persistent capacity surplus of the feed coal and uncertainty in downstream demand, Mysteel's latest annual report of the commodity predicts.

According to Mysteel's estimates, the price anchor of the leading brand Anze low-sulfur primary coking coal extracted in North China's Shanxi province may stand between Yuan 1,400-1,450 per tonne (USD 201-208 per tonne) EXW with VAT this year, marking a mild rise of around 2 per cent on year. The highest level for the grade could rise to Yuan 1,800 per tonne within the year, the report elaborates.

Specifically, price movements in 2026 are expected to follow three phases: continued pressure in the first quarter due to sluggish demand; a modest rebound in the second quarter as construction activity resumes in spring and a period of frequent volatility in the second half of the year amid mixed policy effects, per the report.

Two key policies targeting coal and steel sectors are anticipated to exert opposite impacts on China's coking coal market this year, the report points out. Firstly, the country's anti-involution policy for the coal sector to curb overproduction may see periodic easing in 2026, particularly as authoritles seek to stabilize economic growth. This will likely lead to a growing supply surplus and cap upward strengths for coking coal prices.