Global metallurgical coal short-term outlook April 2023

Australian PLV FOB sunk US$70/t in April, as fears around the global economy scared away spot buying and supply availability improved in Australia. We have made a moderate downward revision to our near-term view on prices and expect prices to average US$230/t in May 2023. We expect June prices to be pushed up by India’s restocking for the pre-monsoon season. From July, prices will be supported by increasing trade into China. Domestic met coal and coke market sentiments continued to soften in China, dragged down by negative coke plant margins, possible steel output cuts and strong domestic metallurgical coal supply. China CFR prices will therefore continue to decline to US$233/t in May 2023. Mining conditions in Australia have improved substantially, but logistics issues are still keeping stocks at the mine rather than at the port. We believe markets will transition to a relatively balanced state by the beginning of H2, keeping met coal prices at an average of US$246/t in H2 2023.