Met coal prices continued on their seemingly inexorable rise in October, breaking the US$250/t mark in the last week. The month began with news of Grasstree's extended disruption and ended with a similar story at Appin area 9. China's 276 workday policy remains in place, and the NDRC has made no meaningful attempt to force an increase in Chinese coal production. Whilst demand in China has outperformed, supply constraints remain the key factor in the price spike, and there has been little to mitigate coal shortages this month. Infact, recent events have led us to forecast an increase in quarterly prices for Q1 2017, to US$210/t, before a combination of stagnant coal demand, and supply recovery, lead to a gradual decline in prices through 2017.