Courtesy of ANZ:
Iron ore prices improved slightly after China flash manufacturing data showed an improvement. However, thermal and coking coal markets continue to track sideways on weak China imports. China’s combined coal imports in Sep showed a 22% y/y decline to 14.9mt. Thermal coal imports declined 18%y/y to 12.4mt in Sep 2011, while coking coal imports were harder hit, down 38% y/y to 2.4mt, highlighting the weak demand conditions. The rally in Newc-Sth China freight rates to USD14/t, with the capesize market buoying panamax rates, has reduced purchases for Australian thermal coal of 5500NAR quality. In Sep, Australian thermal coal exports to China fell 13% y/y to 2.4mt, an 11-month low. Although the biggest loser for China’s thermal coal imports appears to be Indonesia, posting a sharp 38% y/y drop to 4.1mt.
