Coal news and updates

Q1 coking coal contract settled

December 24: Anglo American has settled the January-March, 2014 coking coal deals with Asian steel-makers at $143 per ton FOB Australia, down $9 per ton from the fourth quarter of 2013, market sources said.

The price applies to the miner's flagship premium low-vol hard coking coal brand, German Creek, and is down from $152 per ton FOB in Q4 of 2013. Premium mid-vol Moranbah North had been settled at $139 per ton, sources said. PCI coal was yet to be set, sources said.

The new quarterly price is the lowest since the annual price set for April 2009-March 2010, and coincides with the almost continuous decline in spot prices since late September.

Nonetheless, the price remains substantially higher than the latest spot prices.

Neither buyers nor sellers expressed much enthusiasm about the deal, with miners pointing out this was the lowest level in some time and mills lamented the gap in spot prices.

Sources say that oversupply will continue to drive prices lower and he expected prices to drop below $140 per ton FOB next year.
 
Earlier this month, BHP Billiton-Mitsubishi Alliance (BMA) offered January pricing at $143 per ton FOB, a price which has been accepted by some steel-makers.

It is unusual for Anglo American to lead the quarterly negotiations. BMA is the one to lead usually, but negotiations between BMA and Nippon Steel & Sumitomo Metal were said to have broken down this time.

The downtrend in met coal prices contrasts with the other main steel-making raw material, iron ore, which has been range-bound between $130-145 per ton CFR China for the last five months.