Chinese consumers of thermal coal and iron ore are asking traders to defer cargos and – in some cases – defaulting on their contracts, in the clearest sign yet of the impact of the country’s economic slowdown on raw materials markets.

The deferrals and defaults have only emerged in the past few days, traders said, and have contributed to a drop in iron ore and coal prices.

“We have some clients in China asking us this week to defer volumes,” said a senior executive with a global commodities trading house, who warned that consumers were cautious. “China is hand to mouth at the moment.”

Another senior executive at a different large trading house also confirmed there had been defaults and deferrals in both thermal coal and iron ore.

Chinese growth slowed to 8.1 per cent in the first quarter compared with the same period of 2011, the weakest in nearly three years but still pointing to a so-called soft landing. Other indicators followed by Chinese policy makers, including electricity consumption, rail cargo volumes and disbursement of bank loans, point to a sharper slowdown, suggesting the risk of a hard landing.

Soft commodities like soybeans and cotton have also seen Chinese customers default in the past two weeks, a trader at a third trading house said.

Highlighting a “worrying” weakness in consumer spending inside China, Kim Youngha, the head of Samsung’s China operations, said he expected the market for technology goods to grow 7 per cent this year in China, down from 10 per cent last year. Yu Song, analyst at Goldman Sachs, told clients last week that Chinese economic activity was “exceedingly weak”.

As the world’s main engine of commodities consumption, the Chinese business cycle is key for raw materials markets. The country is particularly important for bulk commodities such as iron ore, used in steelmaking, and thermal coal, used to firepower plants. Iron ore and thermal coal are also critical to the profitability of blue-chip miners such as BHP Billiton, Vale of Brazil, Rio Tinto, Xstrata and Anglo American.

The price of the benchmark iron ore with 62 per cent iron content in Singapore fell on Friday to $135.25 a tonne, down nearly 9 per cent from the end April.