Raspadskaya Gains to 19-Month High After BHP Deal

OAO Raspadskaya, Russia’s largest coking coal producer, surged to its highest in more than 19 months after the world’s biggest mining company BHP Billiton Ltd. (BHP) moved closer to a goal of scrapping annual price deals with steelmakers.

The stock gained as much as 6.3 percent and closed up 2 percent at 190.33 rubles in Moscow, its highest level since July 23, 2008.

BHP, part owner of the biggest coking coal export business, agreed on a 55 percent rise to $200 a metric ton of coking coal in a three-month contract with JFE Holdings Inc., Japan’s second biggest steelmaker. The deal on March 5 was the first of its kind, according to Macquarie Group Ltd.

Moscow-based brokerage Renaissance Capital said the agreement was positive for Russian coking coal producers Raspadskaya and OAO Mechel as the current domestic price is just $110 a ton.

“We expect a shift to quarterly coal pricing on the Russian market, and think major domestic coal producers still have a fair chance of negotiating a $5-10 a ton price increase for second quarter 2010 contracts,” Rencap said in an e-mailed report today.

Mechel rose for a second day, gaining 0.3 percent to 733.05 rubles.

To contact the reporter on this story: Jason Corcoran at Jcorcoran13@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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