Prices for coking coal will increase this year to US$48 a tonne from US$45/t a year earlier, the Japanese steel industry mouthpiece said.

"Taking advantage of the tailwind of price rises in Europe, Australian and Canadian suppliers will naturally [expect] Japanese blast furnace steel mills to accept" similar rises, the newsletter said, adding it would now be "extremely difficult" for Japanese steel makers to avoid a price increase.

It said details of the new contracts have not been made public.

However, Arcelor spokesman Patrick Seyeler denied to Bloomberg it had agreed to the 6.7% price increase.

"Arcelor denies it has agreed to price increases of coal at the level mentioned by the Tex Report," he was quoted as saying. "Currently, most of the 2002 contracts with US, Canadian and Australian miners have been settled with margins of minus 10 to plus 10%."

Recent spot sales of coking coal in Europe have been in excess of US$48.00/t, well up on the US$42.75/t benchmark price for the last Japanese fiscal year ended March 31.

Australian coking coal exporters and Japanese buyers have been locked in negotiations since last October to set prices for the current Japanese financial year, which began on April 30.

With the only way for prices to move seen as up, Japanese steel mills are not in a hurry to settle the talks.

Australia is the largest supplier of seaborne coal and Japan the biggest buyer nation.

Australian producers exported 106.3 million tonnes of coking coal valued at $7.56 billion in 2001, up from 99.7Mt valued at $5.56 billion in 2000.

BHP Billiton is Australia's largest exporter of coking coal.

Thermal coal exports last year rose to 88.1Mt valued at $4.84 billion, compared with 87.1Mt valued at $3.63 billion in 2000.

Earlier this month Australian exporters were reported to have agreed to a 7.7% cut in the thermal coal reference price to US$31.85/t compared with US$34.50/t in the last Japanese financial year.

Rio Tinto is the country's biggest thermal coal exporter. - MiningNews.net