Japan Steels Accept Higher Australian Hard Coking Coal Price

Japanese major steel makers including Nippon Steel and JFE Steel agreed with BHP Billiton Mitsubishi Alliance (BNA), the world largest coal supplier in Australia, in price hike of hard coking coal by 7.7% for January-March 2011 shipment compared with the previous quarter. The price upped after 2 quarters to reflect supply tightness due to strong demand in China and India, or the effect by heavy rain in Australia.

The latest price increased by US$ 16 to FOB US$ 225 per tonne for hard caking coal for January-March from October-December. The price rebounds to the level of July-September.

Heavy rain has impacted coal mines’ operations in Queensland, Australia since late November, according to integrated steel maker sources. Meanwhile, spot coal price is as high as C&F US$ 250 per tonne for China due to steady demand in China and India.

Japanese steel makers are likely to start price negotiations with other coking coal suppliers this week or later. Price negotiations will also commence for soft caking coal and coal for pulverized coal injection.