Shifting trade flows are significantly influenced by the evolving global policies, particularly in the coal sector. As highlighted by Intermodal’s Yiannis Parganas, Mongolia has become a key player in this new landscape.
In 2024, the country exported 56.8 million metric tons (mt) of metallurgical coal to China, representing 46% of China’s total imports. To improve its trading capabilities despite being landlocked, Mongolia has prioritized enhancing its rail infrastructure.
The inauguration of the Tavan Tolgoi–Gashuun Sukhait railway in September 2022 has markedly improved transport efficiency, replacing slower truck convoys with rail transit. Additionally, a new rail corridor connecting the Nariin Sukhait coal basin to the Shivee Khuren border is set to begin construction in April 2025, with an anticipated capacity of 50 million tons annually.
This boost to Mongolia’s rail capabilities will diversify export routes to northern and northeastern Chinese provinces, potentially positioning Mongolia as a dominant met coal supplier and challenging established seaborne competitors. On the other hand, India has emerged as a crucial destination for U.S. met coal, particularly as China’s purchasing shifts towards other sources.
As Indian steelmakers such as JSW Steel and Tata Steel expand their capacities through 2026-2027, the demand for coking coal is expected to rise significantly. The redirection of U.S. coal exports to India could have geopolitical implications, altering U.S.-India-China relations.
However, U.S. coal will face competition from low-cost suppliers like Australia and Russia. Overall, the shift in met coal trade flows is projected to negatively impact the demand for bulk carriers, as imports move closer to processing centers.
While global coking coal trade may see a slight increase in 2025 due to India’s growth, the net effect on tonne-mile demand will depend on the balance of rising and falling import volumes.