Global still production grew at ~2%YoY in April, but only because China continues to record healthy rates of growth. This has helped keep iron ore prices at a decent level despite Chinese ore destocking, but hasn't helped coking coal thanks to poor production rates in key importing countries like Japan and Korea.
Chinese steel production grew at 9%YoY in April and according to CISA data was stronger again in early May.
This seems too fast given still high levels of inventories at steel traders and will probably cause some problems for steel heading into the summer season when things slow down. But this is not necessarily true for iron ore. Small mills have reportedly already started destocking raw materials, so the iron ore price probably has less inventory risk than most commodities.
Coking coal spot price upside from Chinese arbitrage levels is mostly about how strong production is in buyers that have little other alternatives, like Japan and Korea, with the EU playing a significant role as well. Unfortunately run rates here are still slow, with no growth in North Asia + India and Brazil, while the EU is unsurprising contracting quickly at -6%YoY.
As outlined
here and
here, Australian and US coking coal exports continue to grow at a rapid rate, surpassing record rates. With demand ex-China poor, it means producers must increasingly price into a slow Chinese market.
