June 4, 2025 - US metallurgical coal suppliers have had to navigate shifting market conditions due to the US-China trade situation, leading them to focus on other Asian countries, primarily India, where demand for alternatives to Australian coals has been growing.

This strategic pivot has occurred against a backdrop of overall sluggish demand across all regions, which continues to place additional pressure on US suppliers. 

US-China trade tensions 

The US-China tariff tensions determined the metallurgical coal landscape at the beginning of 2025.

The US exported to China, the world's largest steelmaking country, about 2.59 million mt of metallurgical coal in January-April 2024, compared to 465,629 mt during the same time frame in 2025, according to the latest data from S&P Global Commodities at Sea. Most of the 2025 volumes were shipped prior to the first announced reciprocal US-China tariffs on Feb. 4.

With the disappearance of the Chinese market, participants had to adapt. According to sources, part of the flows have been absorbed in Asia, primarily in India.

At the beginning of 2025, several incidents impacted the coal industry, including the complete suspension of operations at the Leer South mine in South Virginia, the suspension of operations at Metinvest's Pokrovskoe Coal in the Donetsk region of Ukraine, and a methane explosion at the Knurow-Szczyglowice metallurgical coal mine in Poland.

These events, combined with lower production from major miners, have changed market dynamics.

The US and China reached an agreement May 12 to temporarily lower tariffs for 90 days, with the US reducing tariffs on Chinese imports to 30% and China decreasing tariffs on US goods to 10%.

Market reaction in the US was limited, with participants suggesting that the pause is a positive development, however, there are no expectations that trade flows will be restored.

"The tariffs remain significant, making it challenging for US coal to compete in China," one US trader said.

The proposed fees by the US Trade Representative on all Chinese-built and -operated ships created concerns among US exporters. There are apprehensions that these fees could cut down export flows from the US, with the initial proposal suggesting a charge of $1 million for each instance of a ship operator from China entering a US port.

"The worst-case scenario has been averted, leading to the expectation that the impact on the coal market should remain relatively muted," another US trader noted. 

Demand varies across regions 

The US exported about 17 million mt of metallurgical coal in January-April, declining from the same period in 2024 when exports were about 26 million mt, CAS data showed.

Europe was to be the main consumer of US metallurgical coal in 2025, however, demand is decreasing as the European finished steel market is under pressure. European buyers have historically purchased US coal primarily on a long-term basis, with less emphasis on spot demand. In 2025, spot demand has been mostly muted.

Europe imported about 6.68 million mt in January-April, down from 8.18 million mt during the same period in 2024, CAS data showed.

India was the second-largest buyer of US metallurgical coal, importing about 3.53 million mt. The country remains in focus among coal suppliers, with continued demand. However, Indian buyers have a variety of options, which may lead to pressure on prices, sources said.

Brazil has also emerged as a key destination for US metallurgical coal, exhibiting more stable demand compared to other regions and facing less competition, with expectations that this trend would continue.

Brazil imported about 3.05 million mt in January-April, a dip from 3.16 million mt during the same period in 2024, according to CAS data.

US metallurgical coal prices mirrored external circumstances, showing slight improvement at the beginning of 2025 amid a series of supply disruptions. However, prices faced pressure due to declining demand and growing concerns over potential new tariff announcements, prompting buyers to adopt a more cautious stance. 

Coal replacement discussions 

Discussions regarding coal's replacement with coke have emerged among market participants due to uncertainties surrounding the US met coal market since the beginning of 2025.

Coke consumption is influenced by regional factors and specific buyers, as some face restrictions on coke imports, complicating their purchasing process.

India announced on Dec. 26, 2024, a six-month quantitative restriction on the import of low-ash metallurgical coke, effective from Jan. 1 to June 30, 2025, Platts, part of S&P Global Commodity Insights, has reported.

"The new law is expected to protect domestic coke producers and reduce coke imports," a US coal supplier said.

The European market has begun to see an increase in offers of predominantly Indonesian coke, as some buyers are opting to purchase coke instead of producing it themselves, and strict import limitations are positioning Europe as a key market for coke suppliers, according to sources.