State-owned Indian mills Steel Authority of India Ltd. (SAIL) and Rashtriya Ispat Nigam Ltd. (RINL) have inked a July-September coking coal contract at $145/mt FOB Australia, down $27/mt on the quarter, for BHP Billiton Mitsubishi Alliance's Peak Downs or Saraji and Anglo American's German Creek coal, sources close to the matter said Thursday.
This was in line with the benchmark settlement concluded by Nippon Steel & Sumitomo Metal Corp. earlier. Company representatives from the miners and the steelmakers either declined to comment or could not be reached. Premium mid-vol material, such as BMA's Goonyella and Anglo American's Moranbah North, was settled at $142/mt FOB Australia, down $27/mt on quarter, and also in line with the Japanese settlements, sources said. Sources said half of BMA's coals were sold on the quarter three number, while the other half was settled using BMA's monthly price. For the monthly price, there was unverified talk of the August monthly price floated at $141/mt FOB for Peak Downs and $138/mt FOB for Goonyella.
Anglo American, on the other hand, was settled fully on a quarterly basis, which contrasts with previous talk the miner was pushing for a monthly pricing regime.
In terms of volume uptake, SAIL and RINL each procured 12 Panamax vessels of prime hard material from BMA, which approximates to around 900,000 mt of material for the quarter. Volume uptake for Anglo American was slightly lower, compared to BMA, with SAIL buying 10 Panamaxes and RINL less than five Panamaxes.
SAIL's uptake of coking coal from July to September grew when compared to last quarter, with three-four more BMA purchases and four more for Anglo's material.
One participant said the agreed volumes were “strong,” reflecting new steel capacity set to come online. Another source attributed this increment to an increase in steel production in the third quarter. “It is the time to pick up,” the source added.
Australian coal producer Peabody and New Zealand's Solid Energy, however, had yet to clinch any deals for the July-September quarter as of Thursday late afternoon, two sources said.
– Sourced
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