From the ANZ:
Iron ore prices held firm, while Newcastle coal prices rose nearly 1% as the uncertainty stemming from annual price negotiations finally ended. Xstrata and Japan’s Tohoku Electric Power settled annual price negotiations at USD95/tonne, down 17% y/y. The settlement price represents a physical premium to Newcastle coal futures of around USD6/tonne. Australian hard coking coal prices eased again last week ($153), taking falls to 9% over the last month. Chinese steel mill margins remain under pressure with one major steel mill in east China closing down a blast furnace producing 6,000 tonne of steel per day. The margin pressure is pushing mills to raise steel prices. China’s largest steelmaker, Jiangsu Shagang, increased rebar prices for prompt delivery by 1% last week.
BREE forecasts thermal coal exports of $12-13 billion this year. Most is sold on contract so unless we’re going to see a 17% rise in volumes that won’t be repeated in 2013-14. In fact the price just fell 5% below BREE’s happy forecasts for 2014.
ANZ Commodity Daily 809 150413
