“In the short term, historical supply-demand price drivers have gone out the window; consumers need coal and there is simply not enough to go around," ABN Amro Morgans analysts said.

“Consumers who settled early rather than wait for the hoped-for collapse in prices have fared the best in all ranks of coal.

“Those that thought they could wait because of stockpiles of coal are now finding themselves with dwindling stocks and no certainty over the rate that they can be replenished."

The analysts said key issues during 2008-09 Japanese financial year negotiations were deliverability of coal; pricing of carryover tonnage; spot pricing versus long-term contracts; and the reticence of consumers to set contract prices in what they believe are abnormal conditions.

And these conditions are expected to continue.

The analysts doubted the Hunter Valley coal chain’s ability to reach its target of 95 million tonnes, with annualised output currently sitting at 86Mt per annum.

Further north at the Dalrymple Bay Coal Terminal the Phase 1 expansion has been completed but the analysts said shortfalls in rail capacity meant the 68Mt nameplate capacity may not be fully utilised.

“It appears to have got to a point where another bout of unseasonable (abnormally wet) weather in Queensland could start to have an impact on steel production and iron ore demand,” ABN Amro Morgans said.

“Tying up tonnage for consumers is now the major issue rather than the price paid."

While hard coking coal and thermal coal benchmark contract prices have been set, up 211% year-on-year for hard coking coal and 125% for thermal coal, the analysts predicted semi-soft coking coal would break its linkage with thermal coal in the upcoming negotiations with a premium to thermal of 49%.