China's coking coal market is forecasted to see more pronounced structural imbalances in 2026, with a widening price gap between backbone and blending coking coals, pointed out by Liu Yanjun, chief analyst at Fenwei Digital Information Technology Co., Ltd., at the Coal Market Outlook 2026 & Sxcoal Annual Conference on December 25.

Some mainstream producers in Shanxi therefore would reduce primary coking coal and fat coal output by approximately 2 million tonnes in 2026, and the proportion of 5# Mongolian coal would continue to remain low, Liu noted. Coking coal prices are expected to fluctuate within a higher price range compared to 2025.

Liu also highlighted that since the second half of 2024, coking coal and coke markets experienced multiple rounds of fluctuations, with the competition between seaborne coal and domestic coal a key focal point.

From late July to early November 2024, global seaborne coal prices plummeted due to weak demand, exerting downward pressure on domestic coal prices.

Later as domestic production increased, Shanxi coal's price advantage gradually emerged, leading to a long-standing loss-making period of seaborne coal imports. By 2025, domestic supply shortages led to strong price rebound, with seaborne coking coal regaining its advantage and imports increasing noticeably.

Liu noted that although the competitiveness of Mongolian 5# raw coal had diminished under the impact of imported coal, by mid- to late-May 2025, the consumption of port inventories and slowed price declines highlighted its cost-effectiveness again. Especially restrictions on Mongolian coal loading in July and destocking at Tsagaan Khad boosted Mongolian coal prices.

Regarding supply, Liu pointed out that by November 2025, China's total raw coal production reached 4.4 billion tonnes, a 1.4% year-on-year increase, although production showed a declining trend around the year-end.

Raw coal output in Shanxi grew by 2.4%, but in the second half of the year, stricter safety regulations and overproduction inspections led to a significant decrease in output. Coking coal supply in China totaled 397 million tonnes during the first ten months of 2025, up 1.2% from the year before.

On imports, Liu reported that total coal imports for the first 11 months decreased by 11.8%, with coking coal imports dropping by 6.0%. Mongolia and Russia remained the dominant suppliers, but imports from the U.S. saw a substantial decline.

In terms of demand, Liu mentioned that from January to October 2025, the consumption of washed coking coal rose by 2.1%, but pig iron output declined by 1.8%, while coke production increased by 3.3%.

Despite a significant decline in pig iron production in December due to weak demand, the basic demand for coking coal has already been suppressed to its lowest point, signaling a demand trough.

Furthermore, coking coal inventories remained at low levels. As of December 17, 2025, domestic inventories at mines, independent coking plants, ports, and Mongolian coal stocks all dropped significantly on a yearly basis.