BHP Billiton, the world’s largest miner, said on Monday that it had moved a “significant portion” of its coking coal sales for 2010 to “shorter term market based pricing”. This follows an agreement last week with Japanese steelmaker, JFE, in which it agreed an April to June contract price increase of 55 per cent.
Traditionally, coking coal prices have been agreed annually and there has been some resistance on the part of steel makers to agree to shorter-term contracts.
“These settlements reflect the company’s commitment to achieving market clearing prices over time across all its bulk commodities,” the company said in a statement. It said it had reached agreements with customers in Japan, China, India and Europe.
Indian analysts said they had been expecting a price of $180 a tonne for coking coal instead of the $200 a tonne they now face being charged. Pawan Burde of PINC Research said “Steelmakers will have to increases prices by $60-70 per tonne,” though with demand for Indian steel still strong he doesn’t see this as a problem.
1 comment:
The Japanese said last week that they aren't going to move to quarterly contracts, but the momentum's with the miners and that these shorter-term deals are here to stay.
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