SYDNEY/TOKYO: Negotiations to set the quarterly price steel mills will pay mining companies for coking coal will resume in Tokyo this week after being put on hold when a cyclone in Australia cut off coal supplies, four sources said on Tuesday.
The interruption pushed spot premium hard coking coal prices above the first quarter contract price as steelmakers were forced to seek out shipments from as far away as Canada and reduce stockpiles to dangerously low levels.
Sources at Australian mining companies speaking on condition of anonymity said both sides were ready to pick up the talks as the four main coal lines operated by Aurizon Holdings Ltd gradually resume shipments, with the biggest line, Goonyella, returning on April 26.
“The cyclone left everyone up in the air,” an Australian mining executive close to the talks said. “No one wanted to negotiate from a position of uncertainty. That has now passed.”
The talks will set the quarterly benchmark price that steel mills will pay for coking coal, largely from Australia, which is the world’s largest exporter of the steelmaking raw material.