Coking coal shreds its contracts

Friday, 16 June 2017

Via Macquarie:

All change for the met coal market

 After initial reports a few weeks ago, further details are coming to light about the shift of the hard coking coal contract to an index-based system. IHS has reported that Nippon Steel agreed to use spot index price average over March to May for calendar Q2 tonnes (equating to ~193/t FOB Australia). This reiterates once more the steady shift towards index-based transations across all commodity markets, as traditional contract systems are viewed as not being as ‘fit-for-purpose’ as they once were.

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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.