Market sources say Q4 coking coal done at $209/MT, down 7% from Q3

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

31 Aug 2010

Quarterly contract prices for hard coking coal were concluded between the BHP Billiton-Mitsubishi Alliance and Japanese steelmakers late Monday at $209/mt FOB Australia for October to December, down 7.1% from $225/mt FOB over July to September, several market sources claimed late Monday. The price of $209/mt FOB would apply to BMA's top brands, Peak Downs and Saraji, which are typically used as a reference in contract talks. This price is higher than most participants in the coking coal market had anticipated, but it is still about $5-10/mt below recent spot deals into China for such material.
BMA's slightly lower grade premium hard coking coals Goonyella and Riverside were reportedly priced at $205/mt FOB, hard coking coal Norwich Park at $195/mt, and semi-hard coking coal Gregory at $190/mt, sources said. Similar prices for the fourth quarter are now expected to be offered to other steelmakers in Asia, Europe and elsewhere.
No official confirmation could immediately be obtained from BHP Billiton or Nippon Steel. A spokesman from JFE Steel declined to comment.
 Coking coal contracts with Japanese steelmakers typically have tonnage fixed annually, and prices negotiated bilaterally every quarter. This is different from iron ore, which is mostly sold in contracts which are linked to spot price indices. Iron ore is the other key raw material used in steelmaking. After falling almost continually since mid-April, spot prices have risen by around $12/mt, or 7%, over the past three weeks to reach $188/mt FOB Australia on Thursday, Platts data showed. This price relates to mid-vol coals.

Source: Platts