At the same time, large-scale infrastructure developments in Southeast Asia are offering a glimmer of hope for exporters under increasing pressure at home, Fastmarkets heard from an industry analyst at a recent conference in March.
China’s domestic slowdown pressures global supply chains
China, the world’s largest producer and consumer of metallurgical coke, is experiencing a notable downturn in domestic steel demand. This trend is directly affecting coke consumption, according to an industry analyst.
Although China produced more than half of the world’s crude steel in 2024, cooling in the real estate and infrastructure sectors has significantly damped coke demand.
Coming into 2025, market participants reached a consensus that crude steel production is expected to decline further, although the exact extent of the decrease remains uncertain. This is expected to lead to a continued reduction in domestic demand for metallurgical coke.
“China’s pig iron production is forecast to decrease by around 1.5% or even more in 2025 due to factors such as energy consumption policies and declining demand, which will continue to affect coke demand,” another industry source said.
Some other market sources also noted rising friction in Chinese steel product exports.
“Tightening global environmental regulations such as US reciprocal tariff are challenging export growth. We expect Chinese steel product exports will be affected notably,” an international trading source said.
India’s import restrictions deepen trade concerns
India, another major participant in the steel industry, has taken a firm stance against coke imports to protect its domestic producers.
In December 2024, India’s Ministry of Commerce announced that coke imports for the first half of 2025 would be capped at 1.42 million tonnes, with 713,583 tonnes of metallurgical coke allowed per quarter.
In addition, India launched an anti-dumping investigation in April 2025 into metallurgical coke imports from Australia, China, Colombia, Indonesia, Japan and Russia, following the quota restrictions.
If dumping is confirmed and found to be harming domestic producers, anti-dumping duties could be imposed on coke imports from these countries.
EU’s carbon border tax brings new cost pressures
The EU’s Carbon Border Adjustment Mechanism (CBAM), set to take effect in 2026, is poised to reshape coke exports to Europe. The mechanism will impose additional charges of $10–15 per tonne on high-emission goods, including coke.
While the measure is a cornerstone of the EU’s climate strategy, it threatens to erode the price competitiveness of traditional coke exporters, particularly China, whose coke production remains heavily coal-based.
Southeast Asia emerges as bright spot
Despite global headwinds, Southeast Asia is showing some signs of hope for coke demand due to its ambitious infrastructure projects.
For example, Indonesia is moving its capital to Nusantara, a project expected to drive a massive construction boom and boost demand for steel and coke.
Vietnam is progressing with its North-South High-Speed Railway, set to begin construction in 2027. Spanning over 1,500km, it will also require vast quantities of steel.
Thailand’s Eastern Economic Corridor (EEC), a $45 billion development zone, is attracting foreign investment in manufacturing, logistics and infrastructure, all of which are heavily reliant on steel.
But most of the new metallurgical coke production capacity in recent years has also been concentrated in the region, primarily in Indonesia, which has kept many market participants cautiously optimistic.
Indonesia’s met coke production has been steadily rising due to new projects coming online. Its total operational capacity of coke reached around 11.85 million tonnes in 2024.
“While Southeast Asia does have strong demand growth potential, it is still unlikely to fully absorb the increased coke production capacity,” a trader said.
“We are not sure if the demand from infrastructure projects will completely offset the effect of trade barriers imposed by India,” another trader said.
According to an industry survey estimate, Indonesia exported approximately 5.60 million tonnes of metallurgical coke in 2024. Of the total export volume, India accounted for around 48% of Indonesian coke exports, while Vietnam and Malaysia together made up only 33%.
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