According to Treasury forecasts released on December 17, prices for iron ore, coking coal and thermal coal in Australia are expected to decline by the end of December 2026, while LNG prices may rise from current levels.
Commodity prices in Australia are expected to return to long-term fundamental levels, the Treasury Department said in its medium-term financial and economic forecast for the 2025-26 fiscal year, which ends on June 30.
Energy coal
Prices for thermal coal in Australia have been supported by demand outside China, which has been rising since the Ministry of Finance released its budget for July 2025 -June 2026 on March 25, the Ministry of Finance said. But he does not expect this trend to continue.
Treasury predicts that spot prices for Australian thermal coal will fall to $70 per tonne on fob terms by the end of December 2026, compared with current levels.
Argus The price of Australian thermal coal of 6,000 kcal/kg on fob terms in Newcastle was last estimated at $108.46 per tonne on December 16, compared with $95.62 per tonne on March 25.
Australia's exports of thermal coal to China in January-October decreased by 11% compared to the same period last year (see table), while shipments to Japan, South Korea decreased by 11%, Vietnam and Malaysia increased, according to data from the Australian Bureau of Statistics.
Steel production
Chinese economic policy support has led to higher prices for iron ore and coal for metallurgy since March, the Ministry of Finance said. But spot prices for iron ore in Australia and coking coal are expected to fall to $60 per tonne and $140 per tonne on fob terms, respectively, by the end of 2026.
The price of premium low-volatility metallurgical coal in Australia for Argus was last estimated at $215.10 per tonne on December 16, while the net price of 61pc Fe (ICX) fine ore on fob Australia terms was last estimated at $90.55 per tonne.
Treasury also expects mining investment to remain flat over the next two years, mainly due to the iron ore and coking coal sectors.
Iron ore producers can invest in projects to maintain production, but coking coal producers are expected to have reduced fixed assets, the Finance Ministry said.
Producers are seeking to sell or finance six coking coal mines in Queensland, market participant Argus reported on December 2.
Oil prices
