End-of-Day PHCC Market Commentary – January 7

End-of-Day PHCC Market Commentary – January 7

Tone: Bullish, but China-led futures enthusiasm has yet to fully transmit into Australian physical pricing

BHP Remains Absent from the Market:

BHP continues to show no visible sign of selling, reinforcing tight spot availability. Market expectation is building that $225 FOB could be the next traded level once a sale materialises.

Indian Anti-Dumping Duties Support PHCC Acceptance:

India’s anti-dumping duties on steel are allowing higher PHCC prices to be absorbed by Indian mills, even as margin pressure shifts toward non-Indian steel producers, who are feeling the squeeze more acutely.

Chinese DCE Limit-Up on Macro and Policy Signals:

Chinese DCE moved limit up, driven by macro optimism and renewed focus on thermal coal production capacity controls, lifting overall coal sentiment.

China Futures → Australian Physical Transmission Still Incomplete:

While sentiment is clearly bullish, Chinese futures strength has not yet fully translated into Australian physical PHCC pricing.

Importantly, TSI paper and Australian physical prices remain highly transmissive and well aligned.

Further DCE Upside Needed to Influence Australian PHCC:

Market consensus suggests an additional ~RMB 250 upside in DCE would be required before Chinese futures meaningfully influence Australian physical PHCC valuations.

Physical Market Still Supply-Led:

Australian PHCC pricing continues to be driven primarily by tight supply and miner discipline, with paper markets largely following physical signals rather than leading them.