Chinese green petcoke prices are falling. Sinopec announced another reduction in prices on Tuesday, taking RMB100 off the listed price. Market players tell us that the market is deathly quiet at the moment, while those in the export market say that enquiries and orders are scarce.

This could be that the effects of the long months of tight credit and easing in the Chinese economy are finally catching up with the market. We have already seen the aluminium market here weaken considerably, with SHFE prices slipping below the important RMB16000 point, and inventory rising. So the raw materials market is sure to show the same signs.

Or it could be the canny Chinese way of doing trading. Chinese markets are like markets anywhere, but the timing is super fast, and the reactions much deeper. When prices start falling, the market steps back. No-one wants to buy now, when the price might fall further, so everyone waits to see how far the price will fall. Jobs and careers are at stake, especially in government-controlled companies, which make up most of the market here, so nobody wants to be make a mistake and buy too high.

The trouble with this tactic is that it tends to make the fears of a market crash come true. If everyone steps out of the market, and prices crash, then it looks and feels and smells like the market has crashed, and it in turn can have devastating effects on companies with slim profit margins or who are deep in debt.

Is Chinese industry, and the economy in general, heading for a hard landing? Are these the first signs of that? Probably not, if only because we along with many others expect that the Government will announce new measures within the next few weeks. It’s true that Europe scares the authorities here. China has far more to lose from Europe than it does from the USA. China’s leaders want to steer China to a consumption-led economy, away from investment and export, so this is the best time to do so.

If the Chinese market can react quickly and deeply in one direction, it can respond the same way. If and when the measures come about, the market is likely to jump. For those trying to buy raw materials from China, as always timing will be everything.