Global seaborne thermal coal prices face persistent upward pressure in 2026-2027, driven mainly by tightening Indonesian export supply and geopolitical disruptions, a CRU analyst said.

Yang Chao, thermal coal analyst at CRU Group, told the 16th Thermal Coal Market Conference 2026 on October 15 that uncertainty over the international situation and exporter policies is profoundly reshaping the market landscape for 2026 and 2027.

Since the start of 2026, multiple hotspots have emerged across the global thermal coal market. The closure of the Strait of Hormuz further boosted demand for alternative coal supplies, with Northeast Asia and other regions shifting to coal-fired generation amid reduced gas-fired power output. Russian coal prices rebounded, turning coal mine profitability positive, but the disruption at Taman port limited its exports. The U.S. is expected to expand coal exports to China in 2027-2028.

Entering the fourth quarter, overseas coal prices climbed rapidly, while domestic coal retained a price advantage, leaving overseas coal uncompetitive in the Chinese market and leading to an overall contraction in China's seaborne imports.

Among major exporters, Indonesia is the biggest variable affecting the short-term market. Yang said that although Indonesia raised its 2026 coal production quota to about 700 million tonnes, it remains insufficient, with fourth-quarter exports tightening notably, which will create a supply shortfall in the seaborne market and exert sustained upward pressure on export prices. A super El Nino event poses additional potential risks to the supply side.

Relatively robust Indian import demand in the fourth quarter further increases the likelihood of Indonesian coal prices staying elevated in the near term. However, Yang noted that because the raised production quota remains insufficient, China's import demand for Indonesian coal may decline year on year in the fourth quarter.

In the medium to long term, Indonesia's quota constraints, growing domestic demand and its Domestic Supply Obligation (DSO) policy could collectively limit its export capacity for an extended period. Nevertheless, Indonesian coal mines' overall profitability is expected to remain favorable over the next five years.

For Australia, demand for high-CV thermal coal increased significantly in 2026. Supported by multiple favorable factors, Australia's thermal coal exports are expected to continue growing in 2027, with miners' profitability improving markedly. However, policy developments in New South Wales add uncertainty to long-term supply capacity and will affect global supply after 2030.

By contrast, Russian coal supply has shown divergent performance this year. Although the Taman port disruption reduced exports to Turkey, profits in major producing regions improved overall, and exports from Far East ports to South Korea remained high. Even accounting for export price discounts, Russian coal profitability improved substantially, and seaborne thermal coal exports are expected to remain broadly stable at current levels over the next five years.

In addition, Colombia's coal exports recovered in 2026, while South Africa's exports rose on demand from South Asia, Northeast Asia and Pakistan.

On price and cost trends, Yang projected that coal prices will pull back in the first quarter of 2027 but will remain flat or slightly above the 2026 average, with global coal mine profitability improving significantly in 2026-2027.

In the long run, the cost curve will change little before 2030 but will rise notably during 2030-2040, with long-term price increases mainly driven by cost escalation and a potential supply shortage around 2035.