On 17 November China further relaxes its 276 day production limit to all safety compliant legal mines until March 2017. We expect all operating legal mines to be qualified for this easing standard. However the loosening is unlikely to quickly boost domestic coking coal output in the country. We expect there to be around 5 Mt of extra coking coal supply in Q4 which can not fill the supply deficiency in Q4 at 16.9 Mt. A sluggish supply response means Chinese steel mills will continue sourcing higher volumes of hard coking coal from Mongolia and Australia to meet demand and will play a crucial role in spot price formation in the seaborne market in the very near term.