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    China coking coal prices set to rise to $200 a ton
    2010-03-15 by Proactiveinvestors

    Coal350

    Bloomberg has reported that steel mills in China, the worlds biggest producer of the alloy, may pay more for domestic coking coal this year as demand increases, Macquarie Group Ltd. said.

    Chinese coking coal may rise to $200 a ton in the next quarter, Macquarie analysts led by Bonnie Liu said in a research report. Domestic coal has traded at a $15- to $25-a-ton discount to the spot market price since December, the analysts said, a gap they expect will narrow.

    BHP Billiton Ltd (ASX:BHP), the worlds biggest mining company, agreed last week to a three-month contract to sell coking coal at $200 a metric ton to JFE Holdings Inc. The price indicates a very tight market for 2010, Liu said.

    We would expect the Chinese domestic price to edge upward imminently, she said.

    Coal imported into China has fewer impurities than domestic output and attracts a premium price, she said. This premium is making import sales more difficult, and imports may decline to an annualized rate of between 40 million tons and 45 million tons in the next quarter, down from a rate of 60 million tons a year set in January, she said.

    Source: www.Bloomberg.com
 
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