End-of-Day Market Summary PHCC – July 18, 2025

End-of-Day Market Summary – July 18, 2025

Tone: China’s Payment Cap in Focus Amid Oversupplied FOB Market

🧠 Insight:

• The Chinese price ceiling is not defined by what the best PLV deserves, but by what Chinese spot buyers are willing to pay for “good enough” PHCC.

• Without broader Tier 1 spot participation or a meaningful shift in Chinese procurement strategies, FOB faces structural headwinds, especially with new GYC supply expected soon.

🔹 Market Anxious to Discover China’s True Buying Power

• The classic question returns: “How much can China really pay?”—a familiar dilemma when the FOB market is oversupplied and spot absorption is weak.

• Market participants are closely watching the China side, looking for firm demand signals or price validation from end users.

  
  

🔹 China Buyer Landscape Splits into Two Camps

1. Seaborne LTC Buyers:

   • Major mills with CFR index-linked LTCs (e.g., Baosteel, Anshan) are not active in spot, enjoying favorable terms through long-term contracts.

2. Spot Buyers (Independent/Non-LTC):

   • These buyers have shrunk sharply in number.

   • Their procurement strategy is hierarchical:

     1. Maximize domestic LTC

     2. Then buy domestic spot

     3. Only finally consider seaborne spot, if pricing aligns

        
        

🔹 Tier Preference and Pricing Structure Becoming Clearer

• The best PLV spot cargoes (e.g. Peak Downs) might still clear at ~$175 FOB Australia equivalent, but Chinese demand isn’t focused on the “best” PLV.

• Instead, demand targets mid-tier Tier 1 and top-end Tier 2, which implies a pricing cap near $155 FOB / $170 CFR equivalent.

• This disconnect between available cargoes and price-anchored demand makes it harder for miners to move volumes without price concessions.