Recent data from Queensland's Port of Gladstone show the coking coal market is rapidly adjusting, ANZ says in Commodity Call.
"Reports are circulating that China is considering allowing some stranded Australian coal shipments to be unloaded, raising hopes of a resolution to the trade dispute," it states.
"Coking coal prices have surged 25% year-to-date, as a result. Newcastle thermal coal prices are up nearly 60% since the dispute emerged."
The outlook for demand for both thermal and metallurgical demand outside China is also looking promising, according to ANZ.
The complete collapse of exports to China has been more than offset by gains in exports to Japan, India, South Korea and Thailand.
"World steel output [ex-China] grew 3.5% year-on-year in December," ANZ said.
"A cold snap across north Asia has boosted thermal coal demand. Combined with a rebound in GDP growth and record global stimulus, prices should be supported.
"Coal markets appear to be stabilising following the restrictions in Chinese imports, with new trade flows being established. In particular, Australian coal shut out of China is rapidly finding new homes. This should see global benchmarks for both thermal and metallurgical coal recover from recent lows."
ANZ said overall, December's coal exports were up 9% year-on-year.
Port of Newcastle coal exports, which are predominately thermal, are down 4% year on year in December, however strong gains have been noticed across most major Asian consumers.