Broken by Metal Bulletin, the news was also reported by a CNBC news channel and Bloomberg.

Goldman Sachs said in a trading report it strongly suspects BHP’s reported agreement relates to the repricing of existing contracts and/or provisional pricing for 2009-10 shipments pending new contract settlements in Japan.

The Wall Street bank has therefore interpreted the news as a temporary or interim measure by BHP.

“In our opinion, it is also highly improbable that BHP would set benchmark terms with Indian buyers ahead of its core Japanese and European customers,” Goldman Sachs said.

The investment bank added the current contract negotiations for the Japanese financial year are currently underway in Tokyo but it was unaware of any settlements for new tonnage.

Goldman Sachs did note that Rio Tinto recently renegotiated existing contracts with some Indian buyers at $US175/t, down from an initially agreed $US300/t, with the change said to be a response to poor contract performance from the buyers.

Goldman Sachs has kept its forecasts for hard coking coal at $US120/t.