Thermal coal — the power market
Thermal (steam) coal is burned to generate electricity. Domestically, its price competes head-to-head with natural gas: when gas is cheap, utilities dispatch gas plants first and coal burn falls. Internationally, seaborne thermal trades against benchmarks like Newcastle, and demand centers on Asia — India, Southeast Asia, and the legacy buyers in Northeast Asia. Quality matters: high calorific value coal travels better economically because you ship more energy per ton.
Metallurgical coal — the steel market
Metallurgical (coking) coal is a steelmaking input, not a fuel. Blast furnaces need it to make coke, so met coal demand tracks global steel output — construction cycles, infrastructure spending, and manufacturing — rather than electricity demand. Premium low-vol and high-vol coals command significant price premiums over thermal, which is why every U.S. producer's strategy deck talks about shifting toward met.
What actually moves prices
- Natural gas — the domestic thermal price ceiling.
- Weather — hot summers and cold winters spike burn; mild ones crush it.
- Chinese and Indian steel output — the met coal demand engine.
- Supply disruptions — Australian floods, rail bottlenecks, and mine outages move seaborne benchmarks fast.
- Policy — retirement schedules and permitting set the long-run supply and demand floors. See our policy coverage.