LAUNCESTON, Australia (Reuters) – China’s coal imports soared in January, more than tripling from the prior month to 33.5 million tonnes, but there are compelling reasons to treat this outcome with caution, including weakness in benchmark Australian coal prices. January’s coal imports were the highest in five years, rising 228 percent from the weak 10.23 million tonnes reported for December. It’s a characteristic of commodity markets that there isn’t always a straight line between supply and demand and prices, and the resurgent buying by the world’s top importer of the polluting fuel is a case in point. It’s always worth being cautious about commodity imports around the Lunar New Year festival, as the week-long holiday in China tends to distort the data in the first two months of the year. This year the new year fell in early February, meaning there was likely some pulling forward of coal import demand as traders brought in cargoes ahead of the holidays. Analysis is further complicated by signals from the authorities in Beijing toward the end of last year, when they made it clear they wanted to keep coal imports to the same level in 2018 as they were in 2017. While this… continue reading
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