July 20, 2026 - Korean conglomerate Posco says Australian coking coal prices are being distorted by a small number of transactions. The company is calling for an industry-wide pricing model as Australia’s $38 billion coking coal sector faces scrutiny similar to that surrounding iron ore.

Major customer challenges existing benchmarks

Korean conglomerate Posco has called for changes to the way Australian coking coal exports are priced, opening a new debate over the benchmarks used in one of Australia’s largest commodity industries. The Australian Financial Review reported that Posco, described as the biggest buyer of Australian commodities, believes the current system can produce prices that do not adequately represent the wider market.

Jahyun Koo, Posco’s head of raw materials procurement, said Australian coking coal pricing was being distorted by a small number of transactions that inflate prices. He called on industry participants to collaborate on a new model. The criticism focuses on how individual deals influence price assessments used by producers and steelmakers, rather than on the quality or availability of Australian coal.

High stakes for a $38 billion industry

The proposal matters because Australia’s coking coal industry is valued at $38 billion. Pricing mechanisms determine the revenue received by miners and the raw-material costs faced by steel producers. If a limited number of trades have an outsized effect on assessed prices, buyers may pay levels that they consider disconnected from conditions across the broader physical market.

Any overhaul would therefore require agreement among participants with competing interests. Australian producers benefit when benchmarks capture strong demand and scarce supply, while customers want assessments supported by a sufficiently broad and representative set of transactions. Traders also need a reference that can be applied consistently to contracts. Posco’s demand for collaboration suggests that the company is seeking an industry mechanism rather than a pricing concession in a single bilateral negotiation.

Coal debate follows pressure on iron ore

The challenge comes as China is pressing miners to rewrite the pricing rules for iron ore, according to the Australian Financial Review. The parallel places two essential steelmaking materials under scrutiny at the same time. Iron ore and coking coal have different markets and pricing arrangements, but the disputes share a central question: whether existing benchmarks accurately reflect physical trade when purchasing or transaction activity is concentrated.

For Australian mining companies, the debate extends beyond the price achieved on an individual cargo. A new methodology could affect contract negotiations, revenue expectations and the relationship between suppliers and major Asian steelmakers. For Posco and other buyers, broader transaction coverage could reduce the influence of isolated trades and make raw-material costs easier to justify internally. The source material does not specify an alternative formula, timetable or list of participating companies, leaving the practical shape of any reform unresolved.

The immediate issue is therefore whether producers, buyers, traders and price-assessment participants accept Posco’s premise that the current market is being distorted. Without a shared diagnosis, replacing an established reference would be difficult. If the industry does begin formal discussions, the key tests will be which transactions qualify, how much trading activity is required and whether the resulting benchmark is accepted on both sides of long-term supply contracts.