North American coal occupies different positions in regional markets, with trade flows constantly adjusting in response to demand, freight costs and relative price competitiveness, producers told this month's Singapore Coking Coal Conference 2026.
US producers have increasingly focused on India and Asia, where demand growth has been strongest, although high freight costs remain a key constraint. In periods of tight supply, customers are willing to absorb freight premiums to secure cargoes. However, in oversupplied markets, exporters may need to absorb the freight differential themselves, reducing margins and making sales less attractive.
As a result, producers continue to maintain relationships with buyers in India and east Asia, while much of their sales to those regions currently conducted on a spot basis rather than through long-term contracts.
Higher freight rates have also reinforced the competitiveness of US coal to Europe and South America, where suppliers often sell on a fob basis and do not directly bear freight costs.
Canada seeking to expand premium coal production
From Canada's perspective, producers argued that expanding metallurgical coal output would help support global steelmakers seeking to lower carbon intensity. Industry participants noted that both the Canadian federal government and provincial authorities have been supportive of expanding the sector and ensuring reliable supply to international markets.
Industry re-examining coal quality metrics
Panelists also discussed the importance of various coal quality characteristics and how different attributes can offset one another in steelmaking performance.
The discussion highlighted that factors such as coke strength after reaction (CSR), coke reactivity index (CRI), ash content and sulphur content must be evaluated holistically rather than individually, as different combinations of properties can deliver similar blast furnace performance.
Against this backdrop, market participants noted that pricing methodologies and benchmark specifications may need to evolve over time to reflect changing coal qualities and steelmaking practices, particularly as mills continue to optimise blends and broaden their use of different coal types.
Freight headwinds add layer of uncertainty
Freight dynamics are increasingly shaping raw material procurement strategies, with panelists highlighting transport costs as a growing influence on steelmaking economics.
Freight rates from the US to India have risen significantly during the US-Iran conflict. Several market participants said rates for discharge cargoes to India have risen to $50-55/t from $40-45/t prior to the US-Iran war. Most Indian buyers remain cautious on the upside freight risks for a longer voyage under such circumstances.
