Global metallurgical coal short-term outlook February 2023

The Queensland PHCC benchmark price nearly hit the US$400/t level, last seen in early June 2022. However, high-priced offers from suppliers for fresh spot cargoes collided with lower-priced re-offered cargoes from steel mills’ term contract arrangements, causing market turbulence. Prices quickly fell back below US$350/t. With the end of wet weather in March, we still expect prices to stay above USD$300/t because of limited improvement in PHCC supply and more robust demand, amid a rally in steel prices. China has lifted the ban on Australian coal as Aussie thermal coal imports have been flowing into China at a rate close to the pre-ban level. International met coal price spreads will normalise as disruptions ease from Q2, with growing demand from China for Australian-origin coal.