FOCUS: Japanese coking coal buyers review index option for Q2 contract tonnages

An unexpected interruption in the supply of seaborne coking coal last month, which led to protracted talks for the second-quarter benchmark contract price, have raised the possibility of using indices to settle the impasse.

A major Japanese steelmaker is considering setting the premium hard coking coal contract price for the current quarter at the average of the indices for the March-May period, multiple market sources told Metal Bulletin. But another Japanese mill appears to prefer settling the talks via the conventional way of agreeing on a fixed benchmark price for the entire quarter, they added. To date, there has been no indication of what that price might be, however. Metal Bulletin’s fob Australia premium hard coking coal index averaged $192.75 per tonne for the March-May period. Regardless how the contract price for premium hard coking coal is agreed, those for other grades of metallurgical coal, such as pulverized coal injection (PCI) and semi-soft materials, are still likely to be concluded via the conventional way due to their relatively low liquidity in the spot market, market participants added. Pricing contract shipments Around a month before the start of each new...


Deepali Sharma

Sophie Zhao

June 02, 2017

07:30 GMT