Recent effervescence in domestic steel market in China has caught the imagination of miners and operators in raw material market. Chinese demand being key determinant of buying and prices has turned the tide in iron ore market with price levels going up by atleast USD 3 per tonne in iron ore during the last week.

Remarkably the import of 73.42 million tonne of iron ore in July by China has broken all previous monthly record and lit the pyre. Near 23 % mom jump and highest import since December 2009 has kindled optimism amongst miners. Suddenly miners are upbeat about improved realization in Q3 & Q4 typically peak demand season before the winter close down.

Likewise the coking coal market has seen spot levels go up by USD 4-5 per tonne during the last week on improved Chinese demand from steel plants. Coking coal levels in PLV grade is around USD 155 per tonne CNF China whereas the impact is muted in low grade .

Coking coal price hike will catch many mills in China and India unawares during the Q4 negotiations and spot bookings for September delivery as finished demand not picking up significantly in India it will not only take away the bargaining strength but also increase the cost with INR in downward spiral.