The 3Q Coking coal contract was set at US$120/t fob. This is a rollover from last quarter’s contract, which was down from the 1Q price of US$143/t. Anglo American and Nippon Steel & Sumitomo Metal Corp negotiated the contract which will likely become the benchmark for other producers/consumers.
Stable pricing amid tough market conditions: The outcome indicates that market players think prices have likely bottomed as supply/demand approaches a better balance. However, while the negotiated price represents a ~$5/t premium to the 2Q spot price average, from the producer perspective this was a disappointing result.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
