MOSCOW (Realist English). Over the final two weeks of May 2026, the global coal industry found itself at a crossroads: world prices are showing strong growth amid geopolitical tensions and seasonal demand, while Russian exporters, faced with a strengthening ruble and soaring logistics costs, continue operating at a loss.
Global Investment and Price Trends
According to a new report by the International Energy Agency (IEA), global investment in the coal industry in 2026 will reach a 14-year high of $180 billion, driven primarily by China and India. At the same time, investment in the oil sector is declining for the third consecutive year.
The conflict in the Middle East and disruptions in liquefied natural gas supplies have triggered a shift in Asia’s fuel balance in favour of coal. Gas prices in the region climbed to around $600 per 1,000 cubic metres.
Thermal coal: Prices for medium-calorific Russian coal at the Vostochny port rose by 3.2% in the week ending May 8, reaching $89.8 per tonne (FOB), a new yearly high. Since the beginning of the year, prices have gained 24.1%, while year-on-year growth reached 36%.
Coking coal: The price of premium Australian coking coal FOB Australia stood at $240.2 per tonne on May 15, slightly up from the previous week ($238.9 per tonne on May 8). Overall, prices have increased by 1.2% since April 17.
Global benchmark: ICE Newcastle coal futures closed at $139.4 per tonne on May 26, the highest level since May 5.
China: Dominance and Redistribution of Demand
China remains the key driver of the global coal market, accounting for more than half of worldwide coal consumption.
Domestic prices: As of May 15, China’s domestic thermal coal price reached 835 yuan per tonne (+33% year-on-year and +23% since the start of the year).
Imports: China continues to increase imports and strategic stockpiles. The CFR South China index for medium-calorific coal (5,500 kcal) rose to $110.9 per tonne.
Safety inspections: Following a major mining accident in Shanxi province, China launched large-scale safety inspections, leading to temporary production suspensions in several provinces. In response, steel mills accepted another increase in coking coal prices — the fourth since the start of the year — which took effect on May 26.
Forecasts: China’s Guosheng Securities expects thermal coal prices to rise to 1,000 yuan per tonne during the peak summer season, citing low inventories across the supply chain. Huatai Securities forecasts that prices will stabilise around 850 yuan per tonne and could surpass the psychological threshold of 900 yuan.
India: Import Dependence and Expansion Plans
India, the world’s second-largest coal consumer, faces its own challenges: the country covers around 90% of its coking coal demand through imports.
Steel sector: In the first quarter of 2026, India increased steel production by 10.7% year-on-year, resulting in a 7% rise in coking coal imports to 18.2 million tonnes. Russia accounted for 18–22% of these imports (3.3–4 million tonnes).
Ambitious plans: India intends to double or even triple imports of Russian coking coal. The country’s deputy steel minister stated that the potential for increasing supplies is “unlimited,” and India is considering acquiring a Russian coal mine.
Energy crisis: Due to extreme heat, electricity consumption in India reached a record 270.8 GW. Twenty-one power plants faced critical coal shortages — less than one week of reserves remaining. Coal India urged its subsidiaries to urgently increase deliveries in order to avoid blackouts.
Russia: Exports Rise While Losses Deepen
Russia’s coal industry has found itself in a paradoxical situation: despite rising global prices and increasing export volumes, companies continue to suffer major losses.
Production: Coal production in Russia fell by 5% year-on-year in January–April 2026, to 140 million tonnes. Hard coal output declined by 5.4%, anthracite production by 15%, while coking coal production increased by 2%. In Kuzbass, the country’s main coal-producing region, output for the first three months of 2026 dropped by 6.6% compared with the same period last year.
Exports: Russian coal exports increased by 4.5% in January–April 2026, reaching 65.7 million tonnes. In April alone, shipments accelerated to 19.9 million tonnes (+18% month-on-month). However, exports to China (excluding Taiwan) declined by 21% to 23.4 million tonnes, while shipments to South Korea and Japan nearly doubled and increased 1.8-fold respectively.
Profitability crisis: Although export prices for Russian thermal coal at Vostochny port rose by 14.5% to $97.5 per tonne, company profits were eroded by several factors:
— freight rates for coal shipments to China increased by 11–39%;
— leasing costs for rail wagons rose by 20–36% (innovative 75-tonne wagons now cost up to 1,200 rubles);
— the US dollar exchange rate fell by 8–16%, to 70.9 rubles.
Deepening losses: The share of rail wagon leasing costs in export coal prices increased from 11–16% in March to 16–22% in May. Deliveries through north-western and southern ports are generating losses of $15–22 per tonne. Russia’s Energy Ministry forecasts that coal industry losses in 2026 could rise by 41% to 576 billion rubles. In 2025, total sector losses amounted to 408 billion rubles.
Europe and the Global Context
In Europe, demand for Russian coal has increased amid high gas prices and significant discounts compared with local market prices. Relatively short logistics routes have also provided an additional advantage for suppliers.
However, according to the IEA, global coal demand in 2026 is expected to remain almost unchanged compared with 2024, with only a slight decline projected.
Meanwhile, BIMCO reports that coal shipments to Japan, South Korea and EU countries rose by 27% year-on-year in April 2026. If the blockade of the Strait of Hormuz continues, global coal shipments could increase by 1–1.5% in 2026–2027.
The global coal market is currently experiencing a period of high volatility driven by geopolitical risks and weather anomalies. China and India, which together account for nearly 70% of global coal consumption, continue building strategic stockpiles and remain heavily dependent on imports.
Russia, despite rising export volumes, has become hostage to domestic logistics problems and currency fluctuations. While exporters continue losing billions of rubles, the industry is waiting for state support and structural reforms.
