Persistent Oversupply and Limited Demand Recovery: Challenges for Coking Coal and Coke Prices in 2025

The recent sharp rebound in coking coal and coke prices lacks fundamental support, as both supply and demand remain broadly balanced with an oversupply tendency. Current market conditions show no significant production cuts for either product, while demand recovery is limited.

On the demand side, pig iron output appears to have reached a short-term bottom. However, even a recovery from 2.25 to 2.35 million tons in daily production would only increase coke demand by around 4,000 tons per day, insufficient to absorb the existing surplus. Meanwhile, steel production remains constrained by overcapacity, and any improvement in profits will quickly drive output higher, creating a cap on price increases.

On the supply side, coal production remains resilient. While some anticipate a temporary supply dip during the Chinese New Year due to mining holidays, this impact is mitigated by high stock levels and completed winter restocking by steel mills and coke plants. Additionally, Mongolian coal imports remain stable, with minimal disruption expected during the holiday period.

Overall, the market lacks strong upward momentum. Prices are unlikely to rise significantly without meaningful supply reductions or unexpected demand spikes. Structural oversupply in both the steel and coking coal markets, coupled with macroeconomic constraints, suggests continued price pressure throughout 2025.