Global metallurgical coal short-term outlook January 2023

The Queensland PHCC benchmark price popped back over the US$300/t level, last seen in early November 2022. Persistent and new developing supply concerns are at the forefront of market participants’ minds. High-priced offers from suppliers for spot cargoes continued to challenge the notion of demand weakness, with supply sentiment still winning the tug of war on prices. Adding to the supply challenges are the prospects of Chinese end-users returning to buy Australian met coal, further limiting spot availability. Domestic Chinese coal prices remained consistent, with current low demand balanced by low supply during the Chinese New Year holiday. Recovering supply both domestically in China and internationally, combined with a dull global demand outlook, will work in sync to pressure prices lower as 2023 progresses.