Quick Perspective – Can 180 FOB Hold?

Quick Perspective – Can 180 Hold?

Executive Summary: 180 FOB is more a fragile checkpoint than a firm floor, with 175 the next test unless rains or surprise JKT/SEA demand emerge.

In our last note, we highlighted that 190–195 FOB could be tested if China concluded its 7th round and a 197 FOB cargo changed hands. That rally was though short-lived. Supply is now outpacing demand, with BHP selling another early October cargo at 189 FOB, breaking below the 190 mark. Cargo count is already above 350 kt, and with PMV cargoes like Illawarra and Brolga still lurking, actual unsold availability is likely higher.

On the demand side, India’s recovery is faltering — stricter coke import quotas haven’t translated into buying, as macro uncertainty with the US dampens sentiment. Chinese steel mill profits have fallen below coke makers’, pushing mills toward coke cut proposals rather than fresh imports. Even when margins were stronger, CFR deals were scarce, with probably only Liuzhou taking Oaky North; now appetite looks even weaker. Arbers won’t touch physical cargoes without hedging, and DCE is offering no good windows. Buyers from JKT or SEA could potentially step in, but for now the chances look slim.

All told, the China floor may sit around 175 FOB, but who dares lift it? For now, 180 looks more like a soft checkpoint than a hard floor. Unless rains or surprise regional demand emerge, the path of least resistance is lower.