Mwhahah. I have warned that China and commodities are a Mexican stand-off. Because China is the only market that matters in terms of volume for all dirt, it could in theory apply fixed prices and there is not a whole lot anybody could do about it. I have argued this is a risk for iron ore. But it also applies to coal:
- China is mulling fixed prices for coal at home in Shangxi province or at the port of Qinhuangdao to crash global prices.
- No decision has been made.
Of course, part of the reason the coal price has run so hot is China refuses to buy Aussie so it’s robbing Peter to pay Paul here.
