Coal prices moving up
Xstrata Raises the Benchmark for Coal
06 April 2010
Xstrata has raised benchmark coal prices with the finalising of athermal coal contract price with a major Japanese utility customer.
As a result of the deal, which states that for the next 12 monthsXstrata will sell coal to the utility for $98 a ton, benchmark pricesfor coal have risen by 40%.
The increase is mainly attributed to rising demand in Asia.
Xstrata was holding out for $100 a ton or more for Japan's 2010fiscal year thermal coal contract starting April 1 while the utilitieshoped to lock in prices around $90.
China is also hungry for coal - its customs data shows that coalimports more than doubled to 13.1 million metric tons in February dueto power demand.
Thermal coal prices to China on delivered terms reached as high as$120 a metric ton in January from less than $90 a year earlier.
Xstrata added that negotiations with other Japanese customers would continue from 5 April.