According to a report in the Australian today, Xstrata has agreed on the contract with Japanese power companies for 2009. The price is half of what it received only a few months ago, when thermal coal export contract prices were hitting highs of $US155/t.

 

Xstrata’s deal could set the tone for other producers which are heading to the negotiating table with Japanese buyers.

 

While coking coal producers have been hard hit this week, with Macarthur and Caledon cutting output from their mines and Xstrata closing Oaky No. 1, thermal coal has not been as dramatically affected.

 

Some coking coal buyers have halted shipments, but to date reports have not emerged that thermal coal customers are not taking deliveries.