In the near term, prices are supported by the activity of restocking in China ahead of the May holiday. However, the market is expected to soften in May-June due to seasonal factors and the weakening of cyclone-related disruptions in Australia, although prices are projected to remain above $200/m.
Diesel fuel costs lead to supply constraints
The main factor in the price increase is the high cost of diesel fuel, especially affecting Mongolian exports.
Mongolia, the largest supplier of coking coal to China, whose exports will reach 60 million tons in 2025, is heavily dependent on road transport using diesel fuel imported from Russia. Fuel accounts for 20-30 percent of total costs, limiting freight volumes and increasing shipping prices.
Alternative suppliers are gaining momentum
Higher costs for Mongolian coal are expected to benefit alternative suppliers such as Australia and Russia.
Russia is expanding its export capacity through the railway infrastructure associated with the Elgin coal mine, although its impact on Australian premium coal is expected to be limited due to differences in quality.
China's demand outlook is weak, while India remains key
