"The market has been in the doldrums for quite some time, but the shackles are off now," Matthew Boyle of CRU Group told Bloomberg.com. The price of coking coal, used along with iron ore to make steel, has more than doubled to four-year highs around $205 a tonne since the beginning of July. That makes it 2016's best-performing commodity.
In the past few years, there has been an oversupply amid slowing Chinese demand and efforts to cut pollution. But now China has started importing more because it is closing some unprofitable local mines in an effort to bolster the sector's overall productivity. Chinese imports in the first seven months were up almost 12% year-on-year, notes FT.com.
Meanwhile, production difficulties at Australian mines have hampered supply. Indian imports have risen, while the steelmaking sector has looked robust of late, underpinning demand. But the surge seems to be a case of too much, too soon. BHP Billiton doesn't expect the rally to last, while BCS Global Markets has dismissed it as "a bubble" inflated by supply squeezes unlikely to be sustained.
Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.
After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.
His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.
Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.
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