Courtesy of ANZ:
Reports suggest Chinese buyers had defaulted on three Australian thermal coal imports and some from South Africa, but are unlikely to spark a wave of cancellations (that we saw in May/June). We remain cautious – China’s domestic stockpiles at power plants are high and many traders in China could face tight liquidity conditions as bank lending restrictions kick-in. Iron ore and coking coal price gains appear to be losing momentum, as markets remain cautious. Declines in China’s domestic steel prices in the past week could pressure iron ore and coking coal markets going forward. Reports suggest Q113 contract agreements for coking coal could be settled around USD160-170/t.
