Coal imports in China are expected to remain strong in the near term, despite efforts to limit the impact of capacity closures on utilities, while prices are likely to be dictated by the country’s policy measures.

Thermal coal prices hit USD100/ton this week as exporters struggled to react to the shifting dynamics in the seaborne market. Led by China’s sudden reliance on the international market, import demand in the Asian sub-continent has surged higher in recent months.

Stocks held on major exchanges have fallen across the board in September. The main reason behind the falls has been falling supply around the world, rather than a pickup in demand. Zinc stocks suffered the biggest fall (-7 percent m/m), while copper was the only metal to register an increase (+2 percent). Even then, it seems base metal markets are tightening.

"If coal output can be temporarily raised leading into the northern hemisphere winter, we could see prices slip over the next couple of months. Even so, we expect spot prices to remain above USD80/t over the northern hemisphere winter," ANZ commented in its latest research note.