This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

China Slows Coal Markets

Reuters reported last week that HSBC's Flash Purchasing Managers' Index, the earliest indicator of China's industrial activity, fell back to 48.1 from February's four-month high of 49.6. An index level of less than 50 indicates a contraction in industrial purchasing within the country.

The new orders sub-index, the biggest of the five components comprising the PMI, fell to 46.2 and weighed most heavily upon the overall index.

The contraction in demand was also visible in the Australian dollar as its value fell. The drop represents a decline in outlook for the country's coal and iron ore industries, which are heavily linked to Chinese industrial and export markets.

Australia's government recently reported that it believes average contract prices for coking coal could fall by as much as 23 percent this year, hitting a low of US $221/ton amid weaker import demand and an increase in output from Australia.

Thermal coal

China's demand for imported thermal coal is expected to increase by four percent in 2012, but the increase represents a slowing from growth in 2011.

Wider uncertainty about economic growth in the Asia-Pacific basin has left many traders on the sidelines as they await the upcoming settlement of contracts between Australian coal miners and Japanese power utilities before providing any serious price cues for the coming months.

An Asia-Pacific market participant told Platts last week that he felt the inactivity in trading was caused by Australian coal producers not wanting to be seen discounting any coal while talks to reach a price for Newcastle 6,000 kcal/kg NAR shipments to Japan are still ongoing.

"Until prices are settled in Japan, the market will probably stay pretty flat," he said.

Platts has currently assessed Newcastle 5,500 kcal/kg NAR thermal coal, a benchmark for the region and much of the world, for delivery during March 27 to May 4 as up US $0.15 at $93.25/MT.

2 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG

Markets

Chart of I:DJI
DOW 16,560.03 -82.98 -0.50%
S&P 500 1,988.87 +1.21 0.06%
NASDAQ 4,828.3250 +15.6170 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs