Platts recently reported that Anglo’s $US330/t contract was struck for the hard coking coal from its flagship underground German Creek operations in Queensland.
Meanwhile, McCloskey reported that BHP has started settling hard coking coal contracts at $325/t for this quarter and was offering $300/t for the month of April.
In a coal sector update report, investment bank Salman Partners said it was unclear if any customers had opted for a monthly contract from BHP.
Salman noted the BHP price levels were said to apply to all the big miner’s top hard coking coal brands, such as the Peak Downs, Saraji, Goonyella and Norwich Park products, which was unlike the sliding scale used in the current March quarter.
While noting that producers and Japanese steel mills had not confirmed the price settlements, Salman said the hard coking coal prices were $100-105/t above the March quarter headline price of $225/t for the coal from the Peak Downs and Saraji mines.
“The fact that the negotiated prices are essentially in line with the latest spot prices (rather than at a discount) reflects the bargaining power that lies in the hands of producers as a result of the current tight supply situation following the floods in Queensland in December and January,” the bank said.
“These settlements should form the basis for the other major met coal producers in their own contract negotiations with their steel customers.”
Lifting its pulverised coal injection coal forecast to $260/t for the June quarter, Salman noted an even greater proportion of the PCI market had been affected by the Queensland floods and that there could be even further upside to its estimate.
The bank expects annual thermal coal contracts with Japanese power companies to reach $120/t.
The analysts said their long-time price assumptions for hard coking, PCI and thermal coal were all raised on the basis of a continued escalation of global input costs and the strengthening currencies of major coal-producing nations.
Salman forecast hard coking coal prices to average $251.35/t free-on-board for the 2011 calendar year.
