End-of-Day Market Summary PHCC – May 20, 2025

End-of-Day Market Summary – May 20, 2025

The market is in wait-and-see mode, with paper structure implying near-term tightness but physical activity muted. Ongoing Chinese weakness is pressuring sentiment, but Australian FOB values remain supported by tight miner selling and lack of fresh GYC offers.

• DCE Continues to Slide; Anze Drops to 1,220 Yuan: The Dalian coking coal contract hit another new low, dragging physical sentiment with it as Anze coal prices fell another 20 yuan to 1,220. Expectations are building for a second round of coke price cuts to be announced next week.

• TSI Remains Stable Despite Chinese Weakness: The TSI index held steady, showing resilience amid Chinese bearishness. The backwardation between June and July paper contracts (+$3) continues a structure first seen in May/June (+$3), suggesting traders expect short-term tightness but uncertainty around mine recovery timelines and the upcoming maintenance season.

• Market Participation Thin: Indian buyers are staying out, and sellers are also inactive, reflecting a pause in market engagement as both sides wait for clarity on direction and availability.

• Alternatives Cap Sentiment, Not Price: While Canadian and Chinese coking coals remain available in the market, their presence is primarily sentimentally capping upside. Fundamentally, they are not yet displacing Australian PHCC, but their visibility is enough to restrain aggressive buying.

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