Commentary: Where's the market reality where met coal is concerned?

摘要

Rumors are flying that suggest the Japanese steel mills have settled contracts to purchase Russian hard met coal at a price in the US95.00/tonne FOB range for FY2009.Russian semi-soft has reportedly been contracted at a price in the US83.00/tonne FOB range.This would,in effect,take met coal prices back to 2007 market levels.If accurate,how could this affect Australian and Canadian contract negotiations with the JSM? Definitely the psychological impact in the annual"war of wills"would work strongly in the JSMs'favor,but will it give the steel mills actual bargaining leverage? Russia is a marginal met coal supplier to Japan,providing between 1.0 to 2.0 million tonnes of product per year.Russian met coal exporters are scrapping to make deals any where possible in this gloomy economic climate.