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Market Chatter: Metallurgical Coal Prices to Stay Elevated as Middle East Conflict Disrupts Supply

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The Middle East conflict will provide price support to the metallurgical coal market in Q2 as the conflict disrupts the fuel's supply chain and raises logistics costs, S&P Global Energy said on Friday, citing traders.

Met coal prices have been elevated starting this month as concerns mount over a worsening shortage of diesel, which would hit mining operations in Australia in particular.

Much of the higher price derives from higher freight costs, S&P Energy said, with Platts Panamax freight rates from East Coast Australia to the east coast of India averaging $25.18 per metric ton in March, a 50.2% climb from February's $16.76/mt.

Freight from East Coast Australia to Qingao, China, cost $22.38/mt in March, a 46.4% jump from February's average of $15.29/mt, according to Platts data.

Traders largely brushed off news of ceasefires and saw few prospects for alleviating supply shocks and higher prices in the medium term.

This has piled further pressure on Australian mining after wet weather in Q1.

Platts Premium Low-Vol Hard Coking Coal prices rose in Q1, reaching $252.50/mt on Feb. 4 FOB Australia, prior to the Middle East conflict.

The PLV HCC assessment price was $236.80/mt FOB Australia by March31, up from $18.80/mt at the start of the quarter while over the same period, Platts PLV HCC CFR China rose to $220/mt from $14.50.

S&P Global Energy said it expects metallurgical prices to stay at higher levels in the short term, as it gains support from the fact that coal can substitute LNG and oil for some end users.

Indian spot demand could retreat however after strong purchases in Q1 and throughout 2025, the research said.

Several Indian steel mills that previously depended on the spot market for premium coal, are said to have signed long-term deals with Australian suppliers at the start of April.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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