China's imports of iron ore have risen for the past two months, but those of coking coal have dropped for the past three, creating a seeming disconnect between the two key ingredients for steel making.
Coking coal imports slumped to 2.42 million tonnes in September, a 37.5 percent decline from the same month a year earlier, according to Chinese customs data.
This followed a drop of 21.7 percent in August and 3.2 percent in July, and in volume terms the September figures was the lowest since May last year.
In contrast, iron ore imports have held up well despite the slowing of growth in the Chinese economy.
Inbound shipments gained to 65.01 million tonnes in September, up 7.4 percent from the same month a year earlier and the highest in 20 months.
August imports were also up and taken together, the last two months were the strongest for iron ore imports this year.
There are several possible explanations as to why iron ore imports are stronger than those for coking coal, but these don't appear to explain why the disparity has accelerated in recent months.
Firstly, the iron ore could simply have been stockpiled and not actually used for producing steel.
Certainly, both June and July were weak months for iron ore imports, a factor that helped send Asian spot iron ore down 22 percent in the third quarter.
It appears Chinese steel mills did use up inventories in the third quarter, perhaps in a successful bid to send prices lower.
But they have subsequently returned to buying iron ore, helping the spot price recover from the year low of $86.70 a tonne on Sept. 5 to $120 a tonne on Thursday.
The steel output also suggests that much of the imported iron ore is being consumed, with steel product output rising to 80.43 million tonnes in September, a gain of 4.9 percent from the year earlier and 2.1 percent up from August's 78.8 million.
It's also possible that domestic coking coal output has increased, negating the need for imports, but this again seems unlikely given anecdotal reports of coking coal miners struggling to even maintain production levels in the face of weaker prices.
Prices also don't explain China's lack of appetite for coking coal, with prices sliding even as imports declined.
The price China paid on average for its coking coal in September was $127.87 a tonne, down 24 percent from the $166.99 a tonne paid in January.
There may have been some build-up of coking coal inventories earlier in the year, creating an overhang of supplies that has allowed for weaker imports in recent months.
For instance, June imports were a record 6.49 million tonnes, up 94 percent from the same month a year earlier and, to put that number in perspective, it was just shy of the 6.85 million tonnes imported for the whole of 2008.
The average cost of June's imports was $149 a tonne, meaning that China appears to have been buying too much coking coal at prices some 15 percent higher than current costs.
It wasn't just June; coking coal imports in this year showed strong gains over the same month in the prior year from February to June.
February imports leapt 134 percent over the same month in 2011, March by 41.4 percent, April by 59.7 percent and May by 81.5 percent.
The first half boom in coking coal imports may be the best explanation of the weakness in the third quarter, and if this is the case, the question becomes whether the overhang of supplies has been worked through or whether weakness in imports will persist for several months to come.
Given that the outlook for the steel sector in China is one of gradual improvement as the government's stimulus measures kick in next year, this bodes well for imports of both iron ore and coal.
While iron ore has maintained its strength in recent months, coking coal clearly hasn't, and the risk is that imports of the fuel will increase by the end of this year and into the first quarter of 2013.