Sunday, 11 Apr 2010
FT reported that annual thermal coal contract prices have increased by 40% following settlements between Xstrata, the Switzerland based miner and PT Bumi Resources of Indonesia with Japanese utilities.
The higher than expected price jump for the Japanese 2010 to 2011 fiscal year, which started this month is the latest sign of surging costs for bulk commodities on the back of strong Chinese demand.
Xstrata and PT Bumi said this week that they have signed annual contracts at USD 98 per tonne and USD 104 per tonne, respectively up from last year’s settlement of USD 70 per tonne.
Mr Colin Hamilton a commodities analyst at Macquarie in London said that “This is not only good news for coal producers this year but, with the coal market likely to be tighter next year, contract prices in 2011 could be settled in excess of USD 100 per tonne from Australia.
Annual thermal coal contract prices hit an all-time high in 2008 of USD 125 per tonne. PT Bumi traditionally obtains a higher price due to the lower shipping cost to Japan from Indonesia than from Australia and South Africa, where Xstrata mines the commodity. The annual contracts are above current benchmark spot prices in Australia’s port of Newcastle of USD 94.9 per tonne and slightly above analysts’ forecast of a deal at about USD 90 per tonne.
The Australian thermal coal spot market hit a bottom of USD 61 per tonne in March 2008. The surge in annual coal contract prices comes as China becomes an importer of the commodity for the first time. Beijing bought overseas about 80m tonnes of thermal coal last year, a big U turn from net exports of about 70 million tonnes in 2005.
India’s strong consumption is also helping to tighten the market. New Delhi imported about 70 million tonnes of thermal coal this year, double the amount it bought overseas in 2007. Although the thermal coal market moved to spot trading in the early 2000s, Xstrata and PT Bumi still maintain contracts with prices settled in annual negotiations. The market watches the talks because Japan is the world’s largest thermal coal importer.
Elsewhere in the commodities market, the benchmark Australian spot iron ore price jumped 3.1% to a fresh 18 month high of USD 166.20 per tonne. Iron ore prices have surged 40.6% since the beginning of the year.
(Sourced from Financial Times)
Review: http://www.steelguru.com/news/index/MTQwNjkx/Steam_coal_price_up_40pct_on_annual_contract.html
FT reported that annual thermal coal contract prices have increased by 40% following settlements between Xstrata, the Switzerland based miner and PT Bumi Resources of Indonesia with Japanese utilities.
The higher than expected price jump for the Japanese 2010 to 2011 fiscal year, which started this month is the latest sign of surging costs for bulk commodities on the back of strong Chinese demand.
Xstrata and PT Bumi said this week that they have signed annual contracts at USD 98 per tonne and USD 104 per tonne, respectively up from last year’s settlement of USD 70 per tonne.
Mr Colin Hamilton a commodities analyst at Macquarie in London said that “This is not only good news for coal producers this year but, with the coal market likely to be tighter next year, contract prices in 2011 could be settled in excess of USD 100 per tonne from Australia.
Annual thermal coal contract prices hit an all-time high in 2008 of USD 125 per tonne. PT Bumi traditionally obtains a higher price due to the lower shipping cost to Japan from Indonesia than from Australia and South Africa, where Xstrata mines the commodity. The annual contracts are above current benchmark spot prices in Australia’s port of Newcastle of USD 94.9 per tonne and slightly above analysts’ forecast of a deal at about USD 90 per tonne.
The Australian thermal coal spot market hit a bottom of USD 61 per tonne in March 2008. The surge in annual coal contract prices comes as China becomes an importer of the commodity for the first time. Beijing bought overseas about 80m tonnes of thermal coal last year, a big U turn from net exports of about 70 million tonnes in 2005.
India’s strong consumption is also helping to tighten the market. New Delhi imported about 70 million tonnes of thermal coal this year, double the amount it bought overseas in 2007. Although the thermal coal market moved to spot trading in the early 2000s, Xstrata and PT Bumi still maintain contracts with prices settled in annual negotiations. The market watches the talks because Japan is the world’s largest thermal coal importer.
Elsewhere in the commodities market, the benchmark Australian spot iron ore price jumped 3.1% to a fresh 18 month high of USD 166.20 per tonne. Iron ore prices have surged 40.6% since the beginning of the year.
(Sourced from Financial Times)
Review: http://www.steelguru.com/news/index/MTQwNjkx/Steam_coal_price_up_40pct_on_annual_contract.html
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