which way now, page-94

Haven't seen this announced by BHP yet.

BMA says to cut coking coal output by 10-15 percent
Wed Jan 21, 2009 11:39am IST Email | Print | Share| Single Page[-] Text [+] TOKYO/PERTH, Jan 21 (Reuters) - The BHP Billiton Mitsubishi Alliance (BMA), the world's largest coking coal producer, will cut output by as much as 15 percent for the next six months as a slowdown in global steelmaking slashes demand.

BMA, whose annual coking coal exports account for nearly a third of the global market, produced 26.3 million tonnes of coal in the first half of the financial year, BHP said in its quarterly production report on Wednesday. [ID:nSYD409818]

BMA is a 50-50 joint venture between Japanese trading house Mitsubishi Corp (8058.T: Quote, Profile, Research) and BHP Billiton (BLT.L: Quote, Profile, Research)(BHP.AX: Quote, Profile, Research).

Coking coal production for the second half of the 2009 financial year is expected to be approximately 10-15 percent below current capacity, BHP Billiton and Mitsubishi said on Wednesday.

BMA's decision to reduce coking coal output comes on the heels of production cutbacks announced earlier this month by Australia's Rio Tinto Group/Plc (RIO.AX: Quote, Profile, Research)(RIO.L: Quote, Profile, Research) and Canada's Teck Cominco Ltd (TCKb.TO: Quote, Profile, Research).

U.S.-based Peabody Energy, London-listed Xstrata Plc (XTA.L: Quote, Profile, Research) and Australia's Macarthur Coal Ltd (MCC.AX: Quote, Profile, Research) have also announced reductions in coking coal output last month, as more steel mills defer shipments.

Demand for metallurgical coal, used for steelmaking, has been particularly hard hit by the global financial crisis, as once-bustling steelmakers across the globe slash production to curtail the drop in steel prices.

The slump in demand has also triggered a swift fall in hard coking coal prices, with spot prices having halved from early last year to about $140 a tonne, according to industry sources.

Macquarie Group (MQG.AX: Quote, Profile, Research) on Tuesday cut its 2009 benchmark contract price forecast for hard coking coal by 21 percent to $110 a tonne, compared with the agreed price of $300 last year.

The bank said the reversal in steel production for 2009 may see seaborne metallurgical coal demand drop 12 percent, or 27 million tonnes this year, and forecast a surplus of about 8 million tonnes in the market. [ID:nSYD389200] (Reporting by Osamu Tsukimori and Fayen Wong; Editing by Michael Urquhart)



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