Japan Major Steels Accept Wide Hike for Soft Coking Coal

Japanese major steel makers including Nippon Steel and JFE Steel agreed with major miners to increase the purchase price of soft coking coal in fiscal 2008 started April to maximum 3.7 times of fiscal 2007. The price increases for 2 years in a row. The negotiation, which is usually settled before the coal year, is finally settled when the miners reduced the offer. Japanese steels are finishing the annual raw materials negotiation though they still negotiate for some miners for soft coking coal. The new price settled with Xstrata and other miners is around FOB US$ 240 per tonne, which is much higher than around US$ 65 in fiscal 2007. The extremely wide increase was realized with 3 times hike for hard coking coal and record spot price for thermal coal. The miners offered US$ 265 per tonne for soft coking coal at the first stage of the negotiation. Japanese steels resisted the wide hike when the supply is less tight than hard coking coal and the almost same level of price reduces the merit for lower price coal usage. However, the market condition including temporally US$ 200 per tonne of thermal coal spot price pressured on the negotiation.