By Siew Hua Seah

November 26, 2025 - As US domestic met coal contract negotiations for 2026 draw to a close, the settlement levels are pointing to a difficult year for US mining firms, with many already having cut high-cost output this year.

Alpha Metallurgical Resources has committed roughly 3.6mn short tons (st) of met coal for shipment to domestic customers at an average price of $136.75/st, down from an average settlement price of $152.51/st last year for approximately 3.7mn st. The company logged met coal sales costs at $97.27/st in the third quarter, a reduction of $2.79/st on the quarter. But this still meant a net loss of $5.5mn t in the third quarter of this year.

US low-volatile coal domestic contract settlements have been pegged in the mid-$140s/st for 2026, down around $10-15/st from last year, as limited availability has lent support to prices. But with up to 9mn st of high-volatile coal capacity set to enter or re-enter the market next year, the domestic price settlements for high-volatile coal fell around $15-20/st, estimate market participants.

The difficult price environment for the seaborne market has meant that more US producers were aiming for a larger share of domestic sales. But with domestic met coal consumption set to be largely stable in 2026, not all producers were able to realise this target. "Most people will be happy with a roll over in volumes for next year but you certainly see more miners fighting for a larger piece of the pie," said one trader.

The competitive nature of this year's domestic negotiations has meant that Warrior Met Coal, which typically focuses on the seaborne market, has sold a few holds on a trial basis to a US domestic buyer recently. But this should come as no surprise as Warrior is set to commence operations next year at its Blue Creek facility stream with nameplate capacity of 6mn st/yr, taking the miner's overall capacity to 14mn st/yr.

European mills in the middle of contract discussions with the US will have their eye on these settlements as well, hoping to secure discounts on last year. In northwest Europe, many mills have indicated plans to increase steel output next year. This a result of a combination of hope that introduction of carbon border adjustment mechanism (CBAM) regulations will support domestic steel demand while others are ramping up steel output to ensure they retain their carbon allowances for 2027.

But on the producer side of the market, warnings continue to intensify on the untenable position current prices place on smaller and higher-cost continuous mining operations. "I don't think we can say that all the capacity coming on line next year will be additional tonnes, some of these would be considered replacement tonnes as more operations fall away," one US supplier said.

Thermal coal has also been a bright spot for US producers as domestic demand continues to be strong, supported by demand from energy-intensive data centre operations. "For a change, our thermal mines have been getting us through this trough in the market, and I am sure it's the same for others with thermal operations as well", said one US mining firm source.

Despite the current challenges, US met coal producers are optimistic that as US and China relations thaw, the punitive 28pc import tariff that China has placed on US coal imports may be lifted and open the way for exports to China to resume. In 2024, US coking coal exports to China rose to the highest level since 2021, reaching 8.1mn t. But exports completely disappeared this year with the start of higher tariffs. Canada and Russia instead increased their exports to China.