Metallurgical coal prices started to fall this month in anticipation of Chinese restrictions on hot metal and coke output. Australian LV spot prices, dropped over US$20/t from mid-month. Most Chinese blast furnaces will have to cut output to under 50% of capacity during winter. Queensland coal exports were strong in August, but will be limited as the year closes due to rail and port maintenance. Spot prices should fall to US$165/t by the end of the year – driving the Q4 contract to US$183/t.