The seaborne metallurgical coal market was playing catch-up with the rest of the steel value chain in May, coming off historical highs. The Queensland premium low-vol HCC price jumped on the back of a record arbitrage of well over US$100/t between the CFR China and FOB Hay Point prices. Swap deals allowed EU and Brazilian steel mills to substitute previously purchased US coal with Australian material. Price volatility is set to continue in an illiquid market. We do not forecast Queensland premium low-vol HCC spot prices to stay at current highs moving into the third quarter. A combination of a Q3 monsoon- related dip in demand for India and Chinese government intervention, will soften the current extreme conditions. However, our breakeven price analysis still points towards mid-US$130/t prices through Q4 and into 2022.