Straya gets a good thermal coal settlement

Thursday 11 May 2017

Via Macquarie:

Thermal coal: A strong JFY settlement for producers while spot weakens

 After signs of an initial deal last week, the JFY annual settlement for thermal coal has finally been agreed between Glencore and Tohoku Electric. Given the backdrop of rapidly falling spot prices, the $84.97/t FOB Australia benchmark is not only up 38% YoY in USD terms, but also above the initial deals agreed in March by some of the smaller suppliers into Japan ($80-84/t FOB). This should be viewed as a very healthy price for producers to lock in for a twelve-month period.

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About the author

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.