Japan Steels Resist Wide Hike for Soft Coking Coal

Japanese integrated steel makers and miners failed to compromise on price of semi soft coking coal for fiscal 2008 started April. Japanese steels reject 300% hike offered by miners citing less tight supply than hard coking coal and the quality. Japanese steels could take more time to settle price for lower grade coking coal, which represents around 30% of the iron making coal, while the steels almost finished the price negotiation for hard coking coal and pulverized coal injection (PCI) coal. Japanese steels rejected FOB US$ 265 per tonne of Xstrata’s offer for soft coking coal, which is US$ 200 up or 4 times higher than fiscal 2007. Japanese steels resist the wider hike than 3 times for coking coal with tighter supply. A steel source said the buyers couldn’t accept more than US$ 200 for the lower grade coking coal. Japanese steels already settled the price for hard coking coal with major miners in Australia and Canada after the US$ 300 per tonne settlement with BHP Billiton Mitsubishi Alliance for high grade hard coking coal. The steels agreed with Chinese shipper to purchase 500,000-600,000 tonnes at international price level while the steels also settled with Russian shipper as such. Japanese steels finished PCI coal price settlement with wide range depending on settlement timing and condition for carryovers. The price is said to be US$ 200 per tonne plus minus around US$ 20 compared with around US$ 70 for fiscal 2007. The steels fixed 60-70% prices for around 70 million tonnes of iron making coal for fiscal 2008.