News
17/12/25
Australia coal, Fe prices to fall; LNG up: Treasury
Australia coal, Fe prices to fall; LNG up: Treasury
Sydney, 17 December (Argus) — Australian iron ore, coking coal, and thermal coal
prices are expected to decline by the end of December 2026, while LNG prices may
rise from current levels, according to Treasury forecasts released on 17
December. Australian commodity prices are expected to return to long-run
fundamental levels, Treasury said in its Mid-Year Fiscal and Economic Outlook
for the 2025-26 financial year ending 30 June. Thermal Coal Australia's thermal
coal prices have been supported by ex-China demand since Treasury released its
July 2025-June 2026 budget on 25 March, Treasury said. But it does not expect
this trend to continue. Treasury forecasts Australian thermal coal spot prices
will fall to $70/t on a fob basis by the end of December 2026, down from current
levels. Argus ' Australian NAR 6,000 kcal/kg fob Newcastle price was last
assessed at $108.46/t on 16 December, up from $95.62/t on 25 March. Australian
thermal coal exports to China fell 11pc on the year in January-October ( see
table ), while shipments to Japan, South Korea, Vietnam, and Malaysia rose, data
from the Australian Bureau of Statistics show. Steelmaking Inputs Chinese
economic policy support has lifted iron ore and metallurgical coal prices since
March, Treasury said. But it expects Australian iron ore and coking coal spot
prices to fall to $60/t and $140/t fob, respectively, by the end of 2026. Argus
' metallurgical coal premium hard low-volatile fob Australia price was last
assessed at $215.10/t on 16 December, while its iron ore fines 61pc Fe (ICX) fob
Australia netback price was last assessed at $90.55/t. Treasury also expects
mining investment to remain unchanged over the next two years, largely because
of the iron ore and coking coal sectors. Iron ore producers may invest in
projects to maintain production, but coking coal producers are expected to run
down their capital stock, Treasury said. Producers are looking to sell or
finance around six Queensland coking coal mines, a market participant told Argus
on 2 December. Petroleum LNG prices have declined since March because of China's
shift toward non-Australian gas, Treasury said. Australian LNG spot prices are
expected to reach $10/mm Btu by the end of December 2026, according to Treasury
forecasts. Argus ' Gladstone fob price — an LNG netback indicator — was last
assessed at $9.01/mm Btu on 16 December, down from $12.90/mm Btu on 25 March.
China plans to prioritise pipeline and domestic gas over LNG imports in the
coming years, PetroChina International's global head of LNG Yaoyu Zhang said on
4 December. Treasury also expects global oil prices to hover around $66/bl over
the next four years, down from its March estimate of $81/bl. Australia's
government will raise less revenue from its petroleum resource rent tax than
previously expected because of the downgrade, the agency added. The tax is
forecast to generate A$1.5bn in 2025-26, down from the earlier estimate of
A$1.95bn. By Avinash Govind Treasury Commodity Forecasts (Mid-Year Economic and
Fiscal Outlook) $ Commodity Argus Price (most recent)* Forecasted Price* Change
(%) Coking Coal 215.1/t 140/t -35.0 Thermal Coal 95.62/t 70/t -26.8 Iron Ore
90.55/t 60/t -33.7 LNG 9.01/mm Btu 10/mm Btu 11.0 * Argus' Australian NAR 6,000
kcal/kg fob Newcastle; metallurgical coal premium hard low-volatile fob
Australia; Argus' Gladstone fob; Iron ore fines 61pc Fe (ICX) fob Australia
netback * fob Australia basis, at end of December 2026 Argus, Commonwealth of
Australia Australian thermal coal exports mn t Market Jan - Oct '25 Jan - Oct
'24 YTD Change (%) China 53 60 -11 India 2.9 3.4 -16 Japan 59 59 0.5 South Korea
11 9.7 12 Vietnam 13 9.6 37 Malaysia 5.9 5.4 11 Australian Bureau of Statistics
Send comments and request more information at feedback@argusmedia.com Copyright
© 2025. Argus Media group . All rights reserved.
