ANZ said an 8% drop in the Baltic Dry Index late last week suggests shipping activity had “returned to more normal levels, albeit at a low base”
The fall comes as coal producers and Japanese steel mills negotiate coking coal contracts for the 2009 Japanese financial year.
Despite several analysts suggesting coal prices would be slashed in half to $US150/t only a few weeks back, ANZ said reports on early talks were much more pessimistic with premium hard coking coal at $120-130/t.
The price settled on for coking coal will also knock-on to the thermal coal market.
It’s not all bad news though. ANZ said South China’s coal buyers were becoming “ticked-off” with high domestic coal prices and were said to be looking to import more coal.
