BY CONTINUING TO USE THIS SITE, YOU ARE AGREEING TO OUR USE OF COOKIES. REVIEW OUR
COOKIE NOTICE

Register with us today

and in less than 60 seconds continue your access to: Latest news headlines Analytical topics and features Commodities videos, podcast & blogs Sample market prices & data Special reports Subscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

IF you are a Platts Market Center subscriber, to reset your password go to the�Platts Market Center to reset your password.

In this list
Coal

Japan's Tohoku settles Oct-Sep benchmark coal price at $94.75/mt FOB: sources

Steel

How the US-China trade war is impacting Asian flat steel markets

Coal

Platts Global Coal Alert

Commodities | Electric Power

Utility Supply Chain Conference

Coal

Indonesia sets Sep HBA thermal coal price at $104.81/mt, up 14% on year

Japan's Tohoku settles Oct-Sep benchmark coal price at $94.75/mt FOB: sources

Perth — Japanese power utility Tohoku Electric and Australian coal producer Glencore have finalized a price of $94.75/mt FOB Newcastle basis 6,322 kcal/kg GAR for thermal coal shipments under October 2017-September 2018 term contracts, market sources said Wednesday.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

Tohoku Electric Power confirmed Wednesday it had reached a price settlement in its negotiations for its closely-watched October term contract, but said it was unable to disclose details, including the price.

"Glencore and Tohoku Electric Power company reached an agreement on October 10," Tohoku Electric said in an emailed response to S&P Global Platts.

Related podcast: China buyers return to Asia seaborne market amid uncertainty on Beijing's import policy, port restrictions

The fixed price of $94.75/mt FOB Newcastle heard applies to Australian thermal coal shipped from Glencore's mines in New South Wales via Newcastle port to Tohoku's power plants in Japan for the year starting October 1.

The October 2016 benchmark was also fixed at $94.75/mt.



Some market sources had expected a higher price for this year's October term contact, citing severe tightness for Newcastle thermal coal following lengthy strikes at several Glencore mines in the Hunter Valley coal field in eastern Australia.

Over January-October, spot prices for Newcastle 6,000 kcal/kg NAR thermal coal, equivalent to 6,322 GAR, averaged $85.66/mt FOB, Platts data showed.

In the early stages of the talks, the spread between opening bids and offers spanned $92/mt to $105/mt FOB Newcastle, basis 6,322 kcal/kg GAR, before narrowing gradually to the mid- to high $90s/mt, sources said.

Monday was a public holiday in Japan, and on Tuesday three 25,000 mt parcels of November-loading Newcastle 6,000 kcal/kg NAR thermal coal traded on globalCOAL at $93.50/mt FOB, $94.50/mt and $95/mt respectively.

The October 2017 benchmark price is still higher than the price agreed in May between Glencore and Tohoku for contracts covering a larger volume of thermal coal shipments over the year April 2017-March 2018 at $84.97/mt FOB Newcastle, basis 6,322 kcal/kg GAR.

The October term contract price between Glencore and Tohoku is often seen in the industry as a staging post and scene-setter for price talks the following April.

Typically, the October benchmark price is followed by other Australian coal suppliers for their contracts with Japanese customers, eventually covering about 8 million-10 million mt/year of the 6,322 kcal/kg GAR grade of Australian thermal coal shipped to Japan, sources said.

Tohoku is one of Japan's largest power utilities with 13 thermal power plants with a combined installed capacity of 12,725 MW, according to the company's 2016 annual report.

Glencore was approached for comment, but had yet to respond at time of publication.

--Mike Cooper, michael.cooper@spglobal.com
--Edited by Wendy Wells, wendy.wells@spglobal.com