The world's largest coking coal exporter BHP Billiton Mitsubishi Alliance (BMA), a 50:50 joint venture between BHP Billiton and Mitsubishi Corporation, has agreed to accept a year-on-year reduction of around 57 percent on coking coal contracts after negotiations with Japanese steelmaker Nippon Steel.
Accordingly, BMA has agreed on a coking coal price of $115-$125/mt for the Japanese fiscal year 2009-2010, compared with around $300/mt in the previous year.
The price agreement, the first this year between the Australian miner and a key Japanese steelmaking customer, could set a benchmark for other contract negotiations for the April-to-March Japanese fiscal year.
Meanwhile, Asian steelmakers are pushing for at least a 40 percent cut in iron ore prices to 2007-2008 levels to end six years of consecutive rises.
The miners, however, are resisting large price cuts, encouraged by signs of a recovery in steel output in China, the world's biggest importer of iron ore.