China's imports of coal and iron ore both hit records in December, but the reaction in the two markets stands in stark contrast.
While the jump in iron ore imports to above 70 million tonnes was seen as a sign that China's economic re-acceleration is underway and positive for commodity demand, the surge in coal imports was met with a much more ho-hum attitude.
Coal imports jumped 37 percent from a year earlier to reach 29 million tonnes in December, the second consecutive month of record inbound shipments.
Full-year coal imports reached 234.3 million tonnes, a 29 percent gain on the prior year and a growth rate almost three times that achieved in 2011.
Despite strong growth in China's coal imports and a similar story from India, coal prices in Asia remain in the doldrums and mining executives are finding it harder to get bankers to talk to them about financing new projects.
The benchmark Newcastle coal price has managed to hold above $90 a tonne since the end of November, but last week eased to $92.94 a tonne from $94.16 on Jan. 4.
This means it is about 15 percent above the 18-month low of $80.82 a tonne hit in October last year, a considerably more subdued rally than the 80 percent gain in iron ore prices between the September low and the peak earlier this month.
Of course, iron ore had a more dramatic slump in the third quarter of last year, but the Newcastle coal price still lost 20 percent over the year, making it one of the worst performing commodities worldwide.
The real difference between coal and iron ore is the outlook for supply, with iron ore still potentially slightly constrained, especially if Indian exports remain depressed due to a crackdown on illegal mining and rising domestic consumption.
Coal supply stands to exceed demand for a second year in 2013, with Barclays estimating an additional 32 million tonnes will be available this year.
However, if China's appetite for imported coal grows at the same rate in 2013 as it did last year, this implies an additional 65 million tonnes.
Even a slackening to half of 2012's pace would still see China absorb the entire available additional coal.
Add to this India's growing imports as domestic output continues to fall short of target, and there is the potential for the coal market to tighten throughout the year.
Cold weather in India may push up imports by half in January to 16 million tonnes from a year earlier, according to trade sources.
Already, India has imported 90 million tonnes from April to November, a gain of 27 percent over the same period in 2011, and the signs are that this growth rate will accelerate further over the whole financial year to end March.
It seems for now the coal market doesn't believe the rising demand from China and India is sustainable, or that supply will increase by more than expected.
It's also probably the case that China's appetite for imports is because prices are low, making imported coal competitive with domestic supplies.
Looking at the breakdown of China's coal imports shows that higher quality supplies have been gaining, with Australia supplying almost one-third of December's volumes.
Australia shipped 9.7 million tonnes to China in December, a gain of 165 percent on the year-earlier month, taking the increase for the whole of 2012 to 82.6 percent.
In contrast, Indonesia managed to increase exports to China by 5.3 percent in 2012, just managing to hold onto its status as the top supplier.
Australian coal generally has more energy and is cleaner burning that the more low-rank supplies from Indonesia, so it appears that Chinese buyers are taking advantage of low regional prices to change to buying better quality coal.
This implies that currently the good export volumes being achieved are a function of the low prevailing prices, and even if prices do rise, there may well be a pullback in both Chinese and Indian demand for seaborne coal.