Chinese energy bubble bust resumes

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The Chinese energy bubble continued to burst yesterday as coking coal futures were put to the sword again:

Given the collapse in Chinese steel output, this was the craziest of the energy bubbles. Really, the only reason for its bid was some possible switching from thermal to coking coal in power consumption but that was always a longbow. Otherwise, it was purely going up because so was every other energy raw material. So it’s no surprise to see it the weakest on the way down.

Policymakers are still applying the jackboot which was enough to sink thermal coal in China:

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.