BHP
takes big cut in Japan coal price
HARD
on the heels of steep declines in iron ore prices, BHP Billiton has
been hit by steep falls in the price of coal sold into the Japanese
market.
SMH,
26
April, 2012
The
latest blow comes amid weak demand in the all-important Chinese
market.
BHP
this week entered into contractual sales of good-quality coking coal
at $US170 a tonne for the December quarter in Japan, down 25 per
cent, while it has reportedly agreed on spot export coal shipments at
less than $US150 a tonne.
The
sales are of good quality, so-called ''hard'' coking coal, which is a
premium product highly sought after by steel producers.
Traditionally,
Japanese steel companies have been willing to pay a premium price for
quality Australian imports, signalling that suppliers of
lesser-quality coals will be forced to settle for lower prices.
The
price fall for deliveries in the December quarter into Japan
represent the continued correction of coking coal prices after they
surged to $US330 a tonne on the back of supply shortages following
widespread floods in Queensland in late 2010.
In
the September quarter, for example, BHP Billiton supplied key
Japanese steel mills at around $US225 a tonne, and has now agreed to
a further 25 per cent price cut for shipments in the December
quarter, reflecting concerns about the extent of the downturn in
demand from China.
Other
major coking coal producers are moving to follow the BHP pricing lead
in Japan, IHS McCloskey reported this week, bypassing the recent
benchmark price leader, Anglo Coal, which has been slow to settle for
December quarter shipments amid the continued decline in coal prices.
The
BHP settlement in Japan took place against the backdrop of a build-up
in stocks at its Queensland mines, which it has been seeking to
offload. At the same time, there has been increasing caution that the
slowdown in Chinese demand could prove to be extended, lasting well
into 2013 for both coking and thermal coals.
''BHP
has clearly been motivated into pro-activity by a growing level of
unsold tonnes, with a number of key customers opting to defer monthly
shipments for August and September, reflecting dipping steel demand
and prices,'' IHS McCloskey reported.
The
settlement has also reinstated BHP and Nippon Steel as the
traditional price setters in the Japanese market.
The
settlements in Japan have taken place against the backdrop of spot
sales by BHP into China at around $US140/5 a tonne, McCloskey
reported this week.
These
prices for coking coal compare with recent spot export sales of
thermal coal from Hunter Valley producers at around $US95 a tonne.
Thermal coal is typically used to generate electricity.
No comments:
Post a Comment
Note: only a member of this blog may post a comment.