Quarterly Coking Coal Settlements Plunge $55/t

Sept. 12, 2012 - PRLog -- Leading Japanese company, Nippon Steel and BMA have reportedly settled the quarterly benchmark coking coal price at US$170/t for Peak Downs/Saraji material and $165/t for Goonyella.

Reported first by Energy Publishing’s international daily, Inside Coal, the new price is a $55/t plunge from the July-September benchmark.

The outcome is broadly in line with BMA’s October monthly price of $168/t FOB and is noteworthy in that until now, the major producer has taken a backseat in quarterly talks, leaving other producers to take the lead.

Anglo Metallurgical Coal was reportedly shooting for a number around $175, or a bit less while Canadian Teck was said to be aiming for a sweetened $168 with performance guarantees.

For PCI producers, who usually achieve a price which is calculated at 72% of the ratio of the hard coking coal price settlement, the news is rather bleak.

However, what will have to be factored in to any PCI talks are reports that one of the largest Low-vol PCI players, Queensland producer Jellinbah, recently settled an estimated 5Mtpa of volume for this quarter at around $129.

As one source remarked: “The Jellinbah settlement can't be ignored,” adding that moving forward, a 75% ratio would be needed to support this number. This is because key Australian and Canadian producers are believed to have FOB costs for their premium quality LVPCI products which are above $130.

Energy Publishing Asia Pacific is a Brisbane-based internationally renowned publisher of leading coal industry publications and reports covering Asia Pacific and the Americas. In addition to the weekday Inside Coal,  our publications include the weekly Australian Coal Report, China Coal Report, Coalfax, Indian Coal Report, South African Coal Report, and the monthly Indonesian Coal Report and importantly, we also deliver key market price indicators for all regions, including the Newcastle Export Index (NEX) and the world's first Coking Coal Index as well as a Database of Prices & Indices.

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