The 15% fall from the June quarter benchmark of $109.5/t was driven by falls in spot prices which were well below $90/t during contract negotiations earlier this month.

Macquarie Wealth Management took into account the weakness in spot prices in making its recent Q3 benchmark forecast of $95/t – which was already below the $98/t low of credit crunched 2008.

This forecast was based on the broker’s observation that the premium HCC benchmark contract had settled $7/t higher than the spot price over the past four quarters.

With spot coking coal prices around $92/t it appears that this link is now broken. The $93/t result is also just $1 more than a reported early offer of $92/t when this round of negotiations with Japanese steelmakers began.

According to Bloomberg, Anglo initially offered $95/t while BHP Billiton Mitsubishi Alliance had offered $92/t for July monthly premium HCC contracts.

The lower contract prices make it likely there will be more global metallurgical coal supply and associated job cuts ahead.

There is analyst interest over whether Australian coking coal exporters will offer a discount to the $93/t benchmark to win market share in Europe.

The $93/t price is 22.5% lower than the September quarter benchmark of $120/t last year.