Japan Steels to Start Coking Coal Price Talk Next Week

Japanese integrated steel makers start the full-scale metallurgical coal price negotiation next week for fiscal 2009 starting April. They apparently have the first talk with the largest supplier, BHP Billiton Mitsubishi Alliance. The talk is expected to start from discussion on the supply demand condition including production cut and requirement in fiscal 2009. They talk to set the price when the price is expected to decrease widely.

As usually, integrated steels and coal suppliers start the coal price negotiation from the end of the year for next fiscal year. However, for fiscal 2009, the talk was delayed when they couldn’t figure out the demand condition with a series of production cut announcement by the steel users.

The price of highest grade coking coal tripled to US$ 300 per tonne in fiscal 2008 when the supply was very tight after the heavy rain in major coal field in Australia. After that, global economy recessions led the oversupply of metallurgical coal.

A leader of major steel maker clearly claimed about the negotiation for fiscal 2009, the suppliers should reduce the annual contract price to the level as fiscal 2007 or less.