March 9 (Bloomberg) -- 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. 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 firstname.lastname@example.org