Semi soft prices tasty on coal companies� palates

EXTRAORDINARILY robust and firm were the phrases used to describe the contract prices settled on semi-soft coking coal for 2007-08.
Semi soft prices tasty on coal companies’ palates Semi soft prices tasty on coal companies’ palates Semi soft prices tasty on coal companies’ palates Semi soft prices tasty on coal companies’ palates Semi soft prices tasty on coal companies’ palates

Courtesy Excel Coal.

Angie Tomlinson

Contract coal price negotiations have pretty much settled with the main outcomes at $US55.60 per tonne for thermal coal – up $3; $97/t for coking coal – down $18; $70-73 for semi-hard – down $16; and PCI coal unchanged at $65-67.

Smaller semi-soft producers settled around the $63 mark (up about $5), but brokerage Citigroup said it is understood Rio Tinto and Xstrata are holding out for $64-65.

“Lower value coking coals fared well, thus PCI and in particular semi-soft coals achieved much better prices than hard coking coals,” Citigroup said.

“The premium of semi-soft to thermal increased to $9/t, from $5.50. Historically it has been $2.”

Citigroup attributed the favourable semi-soft and PCI prices to Europe increasing its PCI ratios and Korea increasing its non-hard metallurgical demand – up 3% over the past two years to make up 20% of its metallurgical coal consumption.

“In India and China, increased use of local semi-soft coals reduced dependence on imported hard coking. In Japan, however, technical limitations restricted such a marked shift,” Citigroup said.

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