Nippon Steel Settles 2Q Semi-Soft Coking Coal at $129/t
June 16, 2019 - Japan's Nippon Steel has agreed to a second-quarter semi-soft coking coal price of $129/t fob Australia with a New South Wales producer, down from their first-quarter settlement price of $132/t fob.
This price came as a surprise to many in the market who expected lower settlement prices amid falling spot semi-soft coking coal and thermal coal prices.
The Argus assessment for mid-volatile semi-soft coking coal has fallen by 5.4pc since the end of February to $117.80/t fob Australia, with a differential to high-vol semi-soft such as that produced in New South Wales of -$22.50/t for an outright price of $95.30/t fob Australia.
But suppliers have insisted that semi-soft quarterly prices should be pegged to a relativity of the premium hard coking coal prices rather than spot prices, sources close to the negotiations said. The Argus premium hard low-volatile coking coal index averaged $207.52/t fob Australia over the March-May period, down from the December-February average of $209.88/t.
"We heard just last week that the difference in price ideas between the buyer and seller were as big as $10-15/t," said a Japanese trader who, as a result, expected negotiations to take more time.
It is understood that Nippon is still negotiating with Australian producers for the second-quarter pulverised coal injection (PCI) settlement price.
Rival Japanese steel producer JFE Steel is expected to begin negotiations for third-quarter PCI and semi-soft coking coal contracts next week.