According to Reuters, Kosep, Komipo, Kowepo, Kospo and Kewspo will cut their contracted tonnage from Chinese producers to about 2.5 million tonnes for this year, compared to 4Mt last year.
The Korean companies reportedly sent a letter to major coal producers China Shenhua Energy, Datong Coal Mine Group and Shanxi Coal Import and Export Group last week to start negotiations.
A source from one of the power companies told the news service the Korean utilities were looking at settling in the low $US60s per tonne, but could also decide to not buy any cargoes and resort to buying more coal from the spot market.
One of the utilities was negotiating with Australian producers for a settlement targeting around $US60/t, another power company source told Reuters.
Newcastle’s spot thermal coal prices have been hovering around $63/t for several weeks and the globalCOAL NEWC index ended Friday at $63.70/t.