Coal news and updates

Q4 coking coal contracts likely at $118-$119 per ton

September 26: Contract prices of hard coking coal between miners and steel mills of Japan for the fourth quarter (Q4) of 2014 are likely to be settled at about $118-$119 per ton, down from $120 per ton for the third quarter (Q3), industry sources said.

“There are indications that Q4 contracts between miners and steel mills would be signed at $119 per ton following reports that Peabody has signed the contract for supply of PCI coal during the quarter at $99 per ton, down $1 from $100 per ton in Q3,” the sources said.

However, a section of industry sources feels the contract for Q4 may be signed at Q3 levels of $120 per ton considering the fact that spot prices are ruling soft at around $112 per ton.

Spot prices were ruling at around the same levels of $111-$112 per ton in June when the Q3 (July-September) contracts were signed at $120 per ton. Going by this trend, there may not be any change in the Q4 contract price, they infer.

On September 16, ICMW had reported, quoting an official of Steel Authority of India Ltd (SAIL), that the “Q4 coking coal contracts will be on a downward trend”.

SAIL is at present India’s biggest buyer of imported coking coal of various grades and types and the price set by it is generally followed by other steel-makers in India.

Incidentally, SAIL’s contract price with miners generally follows the prices fixed by Japanese steel mills and Australian miners.

SAIL, at present, consumes around 12 million tons of coking coal annually and the requirement is likely to go up to 18 mt once it completes its capacity expansion to 23.5 mt from around 15.5 mt at present.