Japan Steels Conclude China Coking Coal Talk

Japanese integrated steel makers including Nippon Steel and JFE Steel agreed with Chinese coal suppliers for purchase volume and price for fiscal 2007 shipment starting April. The steels purchase only hard coking coal at 450,000 tonnes for the year, which is 80% lower than contact volume in fiscal 2006. Japanese steels accepted the small volume to keep the long term relationship when China has limited capacity to export coking coal though they agreed to trade annual 3-4 million tonnes of coal under long term agreement. Japanese steels finished the coking coal price negotiations for all brands for fiscal 2007. They don’t disclose the agreed price. Chinese suppliers reduced the export volume when Chinese domestic coking coal price is much higher than international prices and some pay as high as US$ 120 per tonne. Japanese steels also try to avoid higher priced agreement than Australian and Canadian suppliers and excluded non-coking coal contact. They agreed the 2.12 million tonnes of trade for fiscal 2006, which was 1.55 million tonnes lower than fiscal 2005. The volume increased by 350,000 tonnes to 1.17 million tonnes for hard coking coal while the volume decreased by 1.9 million tonnes to 600,000 tonnes for non-coking coal. However, the shipment was only 1 million tonnes. The price was US$ 115 per tonne for hard coking coal and around US$ 58 per tonne for non-coking coal for fiscal 2006. They have agreement of 6th 5 years trade from fiscal 2006 to ship annual 3-4 million tonnes for the first 3 years.