Met coal spot demand seen weakening in 2026

India’s spot demand for metallurgical (met) coal is expected to decline in 2026 after a strong buying phase last year, according to S&P Global. The country, which was the most active spot buyer in Asia in 2025, has already shown signs of moderation in the first quarter of 2026, albeit remaining a key participant.

The shift is largely attributed to Indian steel mills increasingly preferring long-term supply contracts, particularly with Australian suppliers, for the current financial year starting April. End-users with existing term contracts have also raised their contracted volumes, reducing reliance on spot purchases. 

Market participants said the move is likely to dampen spot demand through the year, although mills continue to track price trends and may opportunistically return to the spot market if prices turn favourable. Additionally, spot demand weakened in the first quarter due to a resurgence in imported coke demand. Competitive pricing of Indonesian coke, following the imposition of anti-dumping duties replacing import quotas, prompted some mills to evaluate alternatives to coking coal. However, the trend appears to be reversing in the current quarter.

Rising coking coal prices have pushed Indonesian coke offers higher, reducing its cost advantage. As a result, Indian buyers are holding back from expensive imports, which may stabilise coal demand dynamics in the near term. Steel demand outlook in India will also play a crucial role in shaping met coal procurement strategies going forward.  With infrastructure spending and construction activity expected to remain steady, baseline demand for steel—and in turn coking coal—may stay intact.

—Informist