Singapore — Mining giant Glencore has settled its October term contracts with Japanese utility Tohoku Electric at $94.75/mt FOB, sources said Monday.
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The current contract covers cargoes of Australian 6,322 kcal/kg GAR thermal coal for delivery to Tohoku Electric's Japanese power plants over the period October 1, 2016 through to September 30, 2017.
The October contract settlement price between Glencore and Tohoku typically becomes a benchmark that is used by other Japanese buyers, eventually covering about 8-10 million mt of thermal coal shipments for the 12-month period starting October each year, sources said.
Neither Glencore nor Tohoku could immediately be reached for comment on the matter Monday.
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Last October's contract price was settled at $64.60/mt FOB Newcastle, basis 6,322 kcal/kg GAR.
This year, thermal coal prices have seen a sharp turnaround amid supply tightness and strong Chinese demand.
The price of Newcastle 6,300 kcal/kg GAR has surged 95% since the start of the year to $98/mt FOB as on Friday, S&P Global Platts data showed.
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