SYDNEY, March 8 (Reuters) - Global miner BHP Billiton has reached terms for a 'significant portion' of its hard coking coal volumes for 2010 with customers in China, Japan, India and Europe, the company said on Monday.
Its contracts are based on shorter-term, market based pricing, reflecting BHP's efforts to move to market clearing prices over time across all bulk commodities, the company said in a statement.
The world's largest miner did not disclose the terms of the deals but on Friday Japan's JFE Holdings Inc, the world's sixth-biggest steelmaker, said it had agreed with BHP to pay $200 per tonne for coking coal for April-June.
That represents a 55 percent increase from the benchmark price for the 2009/10 financial year, ending March 31, of $129, for the bulk commodity used in steel making.
The 55 percent rise was in line with media and analysts' reports and the price represents a around a 10 percent discount from the current spot market price of about $220-$230 a tonne.
It is the first time Japanese steel mills have agreed to a quarterly pricing contract for the key steelmaking ingredient, but a JFE spokesman said the agreement did not mean the firm had scrapped an annual benchmark pricing system.
BHP produced 18.3 million tonnes of metallurgical coal in the six months to December, down 5 percent from a year earlier.
BHP has been pushing hard for a quarterly pricing system for coking coal in place of the 40-year-old annual benchmark pricing system for traditional bulk buyers, arguing that such a system would better reflect market conditions.
But Japanese mills had resisted the proposal, which conflicts with sales practices with their key customers such as automakers that pay for much of their steel on an annual basis.
Global coking coal supplies are tight following a surge in demand from China.
In 2009, China imported 34 million tonnes of coking coal, which was almost a five-fold increase from the previous year.
(Reporting by Balazs Koranyi and Bruce Hextall; Editing by Koh Gui Qing) (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) Keywords: BHP COAL (balazs.koranyi@thomsonreuters.com; +612 9373 1816; balazs.koranyi.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Its contracts are based on shorter-term, market based pricing, reflecting BHP's efforts to move to market clearing prices over time across all bulk commodities, the company said in a statement.
The world's largest miner did not disclose the terms of the deals but on Friday Japan's JFE Holdings Inc, the world's sixth-biggest steelmaker, said it had agreed with BHP to pay $200 per tonne for coking coal for April-June.
That represents a 55 percent increase from the benchmark price for the 2009/10 financial year, ending March 31, of $129, for the bulk commodity used in steel making.
The 55 percent rise was in line with media and analysts' reports and the price represents a around a 10 percent discount from the current spot market price of about $220-$230 a tonne.
It is the first time Japanese steel mills have agreed to a quarterly pricing contract for the key steelmaking ingredient, but a JFE spokesman said the agreement did not mean the firm had scrapped an annual benchmark pricing system.
BHP produced 18.3 million tonnes of metallurgical coal in the six months to December, down 5 percent from a year earlier.
BHP has been pushing hard for a quarterly pricing system for coking coal in place of the 40-year-old annual benchmark pricing system for traditional bulk buyers, arguing that such a system would better reflect market conditions.
But Japanese mills had resisted the proposal, which conflicts with sales practices with their key customers such as automakers that pay for much of their steel on an annual basis.
Global coking coal supplies are tight following a surge in demand from China.
In 2009, China imported 34 million tonnes of coking coal, which was almost a five-fold increase from the previous year.
(Reporting by Balazs Koranyi and Bruce Hextall; Editing by Koh Gui Qing) (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) Keywords: BHP COAL (balazs.koranyi@thomsonreuters.com; +612 9373 1816; balazs.koranyi.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.