Japan Steel Makers’ Coke Contract Price Up by 75% for Apr-Jun

Japanese integrated steel makers are almost closing price negotiations of soft coking coal and pulverized coal injection coal with major suppliers for April-June shipment. The price is likely to surge largely and, as a result, coke price including high grade coking coal is expected to increase by about 75% for April-June compared with US$ 110 per tonne of the annual contract price in fiscal 2009 (April 2009-March 2010). Coal demand maintains strong mainly from China while coal mines’ shipping capacity in Queensland, Australia is seriously damaged by heavy rain. Additionally productive accidents emerged at coal mines in China and USA. Coal supply is very tightening and Japanese steels’ contract price is likely to surge more in and after July.

Asian major steel makers seem to have agreed in the purchase price of soft coking coal at US$ 167 per tonne for April-June shipment. Japanese steels are offered US$ 167 at the maximum level and the price negotiations are almost closing. This contract price will be higher by 109% than US$ 80 of the annual contract price in fiscal 2009.

As to pulverized coal injection coal, European steel makers seem to have agreed in US$ 170 per tonne. Japanese steel makers are also closing the negotiations at around US$ 170, up by 89% from US$ 90 of the yearly contract price in fiscal 2009.

Japanese steel makers have agreed with BHP Billiton Mitsubishi Alliance to set high grade coking coal price at US$ 200 per tonne for April-June shipment, up by 55% from the yearly contract price in fiscal 2009, in early March. Coal price is likely to surge more in and after July. Higher raw material prices would make a large impact on steel product prices.