Domestic price of black coal

IBISWorld expects the domestic price of black coal to drop by 10.8% in 2025-26 to $180.78 per tonne. The domestic black coal price is a function of the domestic prices of metallurgical and thermal coal. With around 95% of coal mined in Australia destined for export markets, domestic prices are heavily influenced by global market conditions. Despite the Middle East conflict causing a temporary surge in coal prices in March 2026, coal prices are still expected to fall over the course of the entire financial year. Demand for metallurgical coal will likely remain subdued through 2026. Steel production activity in China has slowed, contributing to the sluggish demand and pressuring metallurgical coal prices. Still, robust steel production in India has helped offset the slower global metallurgical coal demand. Reduced demand from China is expected to place downwards pressure on the benchmark price and export earnings in 2025-26. Thermal coal prices are also forecast to diminish, resulting from several factors, including the continued shift towards renewables and lower-than-expected gas and oil prices in key markets. These factors are expected to contribute to the falling domestic price of black coal in 2025-26.

The Russia-Ukraine conflict placed upwards pressure on global coal prices over the two years through 2022-23. Prior to the conflict, Russia accounted for approximately 18% of global thermal coal exports and 9% of global metallurgical coal exports while also accounting for approximately 17% of global natural gas production. Sanctions on Russian exports and supply disruptions due to the ongoing conflict exacerbated global energy shortages, driving prices higher. In the domestic market, weather disruptions, like cyclones and flooding in Queensland and New South Wales, have constrained domestic coal supply, placing upwards pressure on prices. For example, in early 2025, adverse weather events in Queensland restricted output and contributed to supply chain bottlenecks, driving prices upwards and contributing to the volatility observed over the five years through the end of 2025-26. Earlier in the decade, Chinese Government restrictions on Australia coal imports in late 2020 constrained demand, causing metallurgical exports to the country to plunge from 50 million tonnes (Mt) in 2019-20 to 12 Mt in 2020-21 and 0 in 2021-22. However, improving relations between the two countries led to a lifting of China's unofficial ban on Australian imports in late 2022-23, replenishing demand for metallurgical coal exports, which recovered to 21 Mt in 2022-23. Thermal coal exports to China have continued to expand to 65 Mt in 2023-24 and 70 Mt in 2024-25. The low base prices in 2020-21 following on from pandemic-weakened demand and the subsequent Russia-Ukraine conflict supply disruptions created a denominator effect that have contributed to what appears to be a resurgence in the price of black coal over the five years through the end of 2025-26, which IBISWorld estimates to have been at an annualised 10.9% through the end of 2025-26.