Courtesy of ANZ:
Newcastle front month futures prices declined to USD87.2/t dragged lower by negative demand sentiment for energy related assets. Iron ore did not fare much better, falling 2.5% to USD103.7/t, while Australia FOB coking coal prices also declined by USD1.42 to UDS146.79. Slower steel demand growth in China and Europe has created a surplus in Asia, weighing on prices. In particular, sliding physical spot steel prices and falling rebar futures prices dented physical iron ore appetite. Reports also suggest European steel mills are aiming for lower contract coking coal prices than the USD170/t Q4 settlement price between BMA and Nippon Steel, which could set a further negative tone in spot markets. In other news, Indonesia’s mining ministry said it was considering increasing royalties to 13.5% from 5-7% currently from coal miners holding IUP business licenses.
