• Bulk commodity prices have fallen noticeably in response to poor demand for steel and electricity, and improving supplies of the commodities. Both coal and iron ore prices have fallen to around their lowest levels since late 2009, consistent with Chinese GDP growth which slowed to its lowest rate in over three years in the June quarter.
• Global steel production volumes declined in June, while production growth in China is once again slowing despite government efforts to bolster demand
• The average spot price for iron ore has fallen in July, to around US$128 per tonne (CFR Tianjin), after peaking at almost US$150 per tonne in April. The current spot price is below US$120 per tonne.
• The average price for thermal coal shipped from Newcastle (FOB) fell by 2½ per cent in July, following a decline of more than 10 per cent in June.
• We have generally revised our near-term outlook for bulk commodity prices lower to reflect the falls seen to date, and persistent signs of weakness in the global economy. Longer term fundamentals remain positive, helping to sustain historically elevated price levels, although downside risks are still significant.

For further analysis download the full report.

• Bulk Commodities Update – August 2012 (PDF, 268kb)