First-Quarter Coking Coal Benchmark Set at $165 a Metric Ton

BHP Billiton Ltd. (BHP), the world’s biggest coking coal exporter, settled the first-quarter benchmark contract for the fuel at $165 a metric ton, down 2.9 percent from the fourth-quarter of this year.

The BHP/Mitsubishi Alliance, or BMA, agreed to the lowest price since contracts shifted to quarterly settlements from annual pacts in the first quarter of 2010, Doyle Trading Consultants LLC, a New York-based energy research firm that specializes in coal, said today.

Companies from Appalachia to Australia have tempered output in an effort to stem a decline in prices. The benchmark, set at $170 for fourth-quarter 2012, is down 50 percent from the record $330 a metric ton set in the second quarter of 2011 after floods in Queensland, Australia, ravaged production.

Ruban Yogarajah, a spokesman for BHP in London, declined to comment, citing company policy.

“It is becoming increasingly clear coking coal has bottomed,” said Ted O’Brien, a New York-based vice president at Doyle.

Prices for the steelmaking component may rebound to $185 a metric ton by the fourth quarter of 2013, he said.

“We expect pricing at these levels to induce further production cuts, but may lead to a faster recovery in 2013,” Daniel Scott, an analyst at Dahlman Rose & Co. in New York, said today in a report.

U.S. producers may fetch lower returns than the benchmark because of lower demand in Europe compared to the Pacific region, O’Brien said.

To contact the reporter on this story: Mario Parker in Chicago at

To contact the editor responsible for this story: Dan Stets at

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.