Xstrata Said to Agree to 2013 Coal Contract at Lowest Since 2009
The miner will supply the fuel starting this month at $95 a metric ton, said two people with knowledge of the deal who asked not to be identified because the information is confidential. That’s down from its April 2012 settlement of $115 and the lowest since deals at $70 to $72 in 2009. The price Japanese utilities agree with Xstrata is typically used as a benchmark for contracts around the region.
Tohoku has agreed to a deal with the producer, Hiroki Enami, a Sendai-based spokesman for the Japanese utility, said by phone, declining to give a price for the accord. Francis De Rosa, a Sydney-based spokesman for Xstrata, declined to comment on contract negotiations.
The settlement is the first below $100 a ton since 2010 and lower than the median estimate of $98 in a Bloomberg News survey. Japan’s coal-import growth is projected to drop 2 percent this year, Australia’s Bureau of Resources and Energy Economics said in a March report. Prices at the port of Newcastle have declined the past four weeks to the lowest since November, data from IHS McCloskey show.
Power producers agreed to pay a record $129.75 in 2011 as flooding curbed output in Australia and Indonesia, the world’s biggest exporter. Contracts were settled at $98 in 2010.
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