I believe that there are some things to consider with respect to your case which will hopefully assist you in making an informed decision.
Physics:
It is important to stress the fact that you are currently ranked first in this subject, which is favourable in terms of obtaining the highest possible Assessment Mark (the mark that reflects your internal performance and contributes 50% of your HSC mark), provided you are able to maintain this optimal rank by performing at an equivalent level in your trial exam. Coupled with favourable performance in your Physics HSC exam, you can maximise your chance of achieving a good HSC mark in this subject, particularly in the event that you achieve the highest Examination Mark (the mark that reflects your external performance and contributes the other 50% of your HSC mark) in your cohort, which seems possible given your current rank in this subject.
Chemistry:
Your average mark and current rank in Chemistry can potentially indicate two things:
- Your Chemistry cohort is more academically capable than your Physics cohort.
- The assessment tasks/exams for Chemistry are easier than those set for Physics at your school.
If the first aspect is true, you may wish to consider keeping Chemistry on the basis of a better-performing cohort, the positive effect of which may be reflected in your Assessment Mark. However, keep in mind that, in such a case, there would be an increased reliance on elements that are beyond your control, such as the performance of your peers (which involves fully trusting other students), as opposed to having to worry about your own performance only in the case of Physics.
If the second aspect is true, then you should probably consider dropping Chemistry, since a favourable rank is definitely more advantageous than a better average raw mark. Raw assessment marks have no effect beyond determining a student's rank in a particular subject, making higher ranks an essential component that contributes to favourable performance.
I hope this helps!