Coal Prices Jump for Third Day Amid India's Mega Project

Jakarta, CNBC Indonesia – Coal prices rose for a third straight session. Refinitiv data show that on Tuesday trading (19 May 2026), coal prices closed at $139.4 per troy ounce, up 1.01%. This extends the positive trend with a 4.5% gain over the last three days. Coal prices were also at their weakest since 31 March 2026, more than 1.5 months ago. The surge in prices is supported by news from India. India’s plan to expand its steel capacity is expected to push cumulative imports of metallurgical coal toward 6 billion tonnes in the coming decades, potentially triggering import bills of nearly $1 trillion. As India aims to reach 300 million tonnes per year of crude steel capacity by 2030, around 64% of the 382 million tonnes of capacity under development relies on blast furnace technology that heavily uses coal. With an average requirement of 770 kilograms of metallurgical coal per tonne of steel, the planned blast furnace capacity alone could require an additional 140 million tonnes of coal per year, nearly doubling current supply. Import dependence and projections: Currently, the Indian steel sector imports 90% of metallurgical coal needs, as domestic coking coal contains high ash and sulfur contents not suitable for steelmaking. Metallurgical coal imports rose 9.4% year-on-year in 2025, reaching more than 83.1 million tonnes, and are projected to reach 149 million tonnes by 2035 from around 94 million tonnes in 2026, according to S&P Global estimates. Demand for coking coal is expected to rise sharply from 87 million tonnes in FY25 to 135 million tonnes by 2030, driven by expansion of the steel industry under the National Steel Policy. The blast furnace - basic oxygen furnace pathway accounts for about 65% of installed capacity and consumes 95% of total Indian metallurgical coal demand. Meanwhile, the Chinese thermal coal market has stagnated due to weak demand from the energy and industrial sectors, while market sentiment remains cautious. Several key factors include tepid demand and cautious sentiment. Domestic electricity consumption has declined as the summer remains relatively mild and energy savings measures in the industrial sector. Power plants are buying coal more cautiously due to stock levels that remain adequate. Traders and buyers have held back on long-term contracts due to fluctuations in global and domestic coal prices. Policy uncertainty and potential environmental regulations also add caution to the market. Analysts expect the market to become more active as electricity demand rises ahead of winter or when industrial demand surges. However, oversupply and buyer caution could cap price gains in the near term.