Indian Coal Minister Santosh Bagrodia recently told Hindu Business Lines that the nation’s imports of coking coal are likely to drop while the Sydney Morning Herald newspaper said some of BHP Billiton’s Indian customers were reportedly trying to renegotiate the price of their coking coal contracts.

Last week, ANZ senior commodity strategist Mark Pervan downgraded premium coking coal from $US305 per tonne free on board in the bank’s previous estimate to $155/t FOB for the 2009 forecast, a fall of over 49%.

“We are starting to see these steel production cutbacks bite," he told the newspaper.

“There are very large stockpiles of coking coal and coke sitting in China at the moment."

But Pervan added that the high quality of BHP’s coal meant the producer was more insulated than others, although he said it was likely to still have to make mild production cuts.

“It is the best of a weak bunch," he said.

BHP spokeswoman Samantha Evans would not comment on coking coal production or price cuts to the newspaper but acknowledged the current market conditions presented very challenging times for all miners.

Rio Tinto spokeswoman Amanda Buckley indicated the company was monitoring the situation.

“We have had steady business progress on sales, but we are watching future sales and demand closely," she said.

Last week Macquarie Research forecast hard coking coal prices would sink to $US140/t FOB next year.