Coal burn turned negative YoY in the middle of April after a weak start to the month. Some of this is likely to be in part due to better hydro availability, but its also a sign that the top down macro picture is weak.
It also suggests that the recent small gains in Chinese coal prices will remain short lived, with the coal stock starting to rise in absolute terms and in days of consumption (now at 20 days).
While coal burn remains weak, it does look like Chinese demand for physical copper has picked up. Premiums for delivery have shot up from the lows of ~$85/t to now sit at ~$135/t.
Copper prices have crept higher as well, although still remains well below levels prior to the big fall in March.
The final HSBC PMI data were a little weaker than the flash estimates at 48.1, with the divergence between the official measure seen during periods of weakness in the last few years now returning.
As
posted here, steel production reportedly bounced in mid-April, but this was more to do with problems with the data rather much stronger production. At the core, the data suggested activity is sluggish.
It seems to be generally accepted that activity in China is weak, although some of the signals from these data suggest its a little worse than the current consensus.
The bigger debate seems to be about how and when policymakers will turn activity around. There are some signs that they have taken their foot off the break a little, with SHIBOR rates remaining lower and announcement of some additional infrastructure spend.
There are, however, few signs that this has been meaningful enough to change the current trajectory for activity. Indeed, it is becoming clearer that activity won't repeat the improvement we saw in 2H13, with policymakers having much more work to do if they want to ease the squeeze on activity.
