Nippon Steel to Buy Spot US Coking Coal

Nippon Steel decided to purchase 200,000 tonnes of US coking coal immediately. The firm will contract for April arrival to supplement the inventory when the inventory decreases after late March due to supply trouble from Australian major mines. The firm decided the additional purchase for preparation to further supply trouble when Australian miners still prepare for recovery. Kobe Steel and Nisshin Steel also purchase coking coal at spot base. The integrated steel makers try to avoid raw material shortage through the first spot purchase in 3 years under very tight worldwide coking coal supply. Nippon Steel has still normal level coking coal inventory enough to one month consumption. However, the inventory could decrease to 10-14 days level in late March to early April due to supply trouble after BHP Billiton Mitsubishi Alliance of Australia declared force majeure in January. Though the inventory can support the operation, the firm will supplement the inventory to cope with additional trouble including vessel delay and longer Australian trouble. Kobe Steel purchased US coking coal arriving in April. Nisshin Steel purchases 150,000 tonnes of coking coal from China and Russia and considers purchase from USA. Sumitomo Metal Industry also studies US coal purchase. They didn’t disclose the price. However, the price could be more than US$ 300 per tonne delivered including around US$ 80 per tonne of panamax freight when US spot coking coal price is more than US$ 250 per tonne. Major miners in Queensland, Australia are suffered from major rain in mid-January and the recovery delays due to another rain in mid-February. According to Japanese source, BHP Billiton Mitsubishi Alliance tries to resume the operations for the mines but it is unknown when the mines recover normal operations. The supply trouble of the major mines could tighten world supply condition and Japanese steel makers could take additional action to secure coking coal.