January has seen the metallurgical coal market regain some balance, as Dalrymple Bay Coal Terminal has worked down vessel queues and demand for spot shipments has softened. With markets becalmed, low-volatile Australian spot prices fell about US$50/t during the second half of January. A relative period of quiet is upon us as China celebrates the New Year, and the market awaits some guidance on policy direction from the two sessions forum in March 2018. This year Australian miners are in a position to increase exports by 10 Mt over 2017, and improving availability of hard coking coal both in China and internationally, underpins our view of lower prices during 2018. However, supply is still fragile. Winter weather in the northern hemisphere and the threat of storms in Queensland’s wet season could crimp miners' plans in the rest of Q1 and early Q2. China's ability to grow production is further complicated by Government plans around supply reform and environmental protection.