HomeProduct Complimentary download Nippon Steel signs Q3 met coal with Glencore at $93/t FOB: sources

Nippon Steel signs Q3 met coal with Glencore at $93/t FOB: sources

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Publish time: 18th June, 2015      Source: Platts
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Nippon Steel & Sumitomo Metal Corporation has settled premium mid-vol hard coking coal quarterly negotiations with Glencore for July-September at $93/t FOB Australia, down $16.50 from the second quarter, according to various sources in Japan, Australia and Singapore on June 17.This price applies to Glencore’s flagship premium mid-vol brand Oaky Creek. However, Platts could not confirm if other premium low-vol suppliers like Anglo American and Rio Tinto have inked a quarterly deal.Several sources expected premium low-vol and mid-vol coals to be priced at parity or at small spreads relative to each other due to continued supply tightness for the latter category.Both coal segments were priced at $109.50/t FOB Australia in the second quarter this year.It remains unclear whether other mills and miners will adhere to this settlement price for premium mid-vol.Sources from two other Japanese mills said they had not received any offers from suppliers and would seek further clarity before recognizing this price as the benchmark.If followed, the settlement will be the lowest since the second-half of 2004, and represents a relatively tight premium to current spot prices compared to previous quarters.Sources said the recent rebound in spot prices was an important consideration in setting this quarter’s price.Australian premium hard coking coal prices have risen 9.6% from a multi-year low in mid-May to $97.25/t CFR China, or a realized $88.85/t FOB Australia on June 16, according to Platts assessments.Persistent spot supply tightness, as well as the wide seaborne to Chinese domestic coal arbitrage gap, has hiked valuations in the region’s clearing market.