xstrata to start coal contract price talks

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Xstrata to start coal contract price talks in Japan next week: source

Friday, 22 June 2012 | 11:00

Representatives of Xstrata are expected in Japan next week to start annual talks to settle Australian thermal coal prices for term contracts whose delivery begins in July, a Japanese source said Thursday.
Japanese power utilities and general industries settled an April 2012 - March 2013 Newcastle contract price of $115/mt, industry sources said.
The Japanese source said he expects Japanese power utilities to push for a July 2012-June 2013 contract price of $90/mt in the negotiations due to falling spot Newcastle prices. On Wednesday, Platts assessed the 90-day FOB Newcastle 6,300 kcal/kg GAR at $84.30/mt.
However, the Japanese source said Xstrata would mostly likely resist a July contract price of $90/mt. He predicted a contract price settlement at $90-100/mt FOB.
Tokyo Electric Power (Tepco) will be the lead negotiator in the price talks with Xstrata, the source said.
Source: Platts