Australian mining company BHP Billiton has announced that it has cut its 2009 contract prices for metallurgical coal by about 58 percent compared to the levels of the previous year.
"Based on settlements to date, US$ FOB prices for prime metallurgical coal products are expected to decrease by approximately 58 percent from 2008 levels," BHP Billiton says in its statement, adding that the terms for a significant portion of its 2009 contracts have been concluded, following settlements with key global customers.
As SteelOrbis previously reported, the first long-term contract that set the industry benchmark was agreed at the end of March 2009, when BHP Billiton Mitsubishi Alliance (BMA), a 50:50 joint venture between BHP Billiton and Mitsubishi Corporation, agreed to accept a year-on-year reduction of around 57 percent on coking coal contracts after negotiations with Japanese steelmaker Nippon Steel.
At the end of March, BMA agreed on a coking coal price of around $128/mt for the Japanese fiscal year 2009-2010, compared with around $300/mt in the previous year.