china thermal export contract $145/mt

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China, Japan agree $145/mt FY 2011 LT coal price
Manila (Platts)--20Jun2011/948 am EDT/1348 GMT

China and Japan are believed to have agreed on a fiscal 2011 thermal coal price of about $145/mt FOB, basis 5,800 kcal/kg GAR for Chinese thermal coal exports to Japan under the so-called LT term contract, a Japanese source said Monday.

The FY 2010 LT thermal coal contract price was $115/mt FOB.

The Japanese source said talks are continuing to fix the FY 2011 tonnage to be exported by China under the LT. One source suggested that the FY 2011 tonnage will be lower than the 1 million mt of Chinese coal exported under the FY 2010 agreement.

He said Japanese thermal coal buyers are not that keen on obtaining supplies from China, but are mainly interested in keeping the decades-old LT contract arrangement.

The Japan-China LT, so named after the initials of the Japanese and Chinese negotiators who contributed to the development of trade relations between Japan and China in the 1960s, started in 1978.

The great bulk of Chinese coal shipments into Japan were traditionally funneled through the LT. However, more recently, Chinese tonnage and price contracts were negotiated annually by the Japanese power utilities, cement companies and other general industry users under the auspices of the private coal group, Japan Coal Development (JCD), industry sources said.

China Coal, one of China's four licensed exporters, is the chief LT negotiator for the Chinese exporters to Japan.

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