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Prices for the remainder of its expected production would be negotiated later in the year, it added.
The agreed term price is almost 10% higher than NWR’s fourth-quarter 2014 settlement with customers, but disappointed some market observers.
Ratings agency Moody’s said on Thursday that NWR’s 2015 price settlement of $110 per tonne was lower than expected and would translate into weaker than expected financial performance.
Moody’s predicts that full-year 2015 coking coal prices will average $120-140 per tonne.
The agreement to lock in such a high proportion of NWR’s expected output for the year represented a departure from the company’s standard practice in recent years, the agency said, noting that coking coal prices had been negotiated with customers on a quarterly basis.
“While an annual price agreement provides stability and significantly reduces volatility,” Moody’s said, “the new agreed price level suggests that there is currently very little confidence in a faster and more meaningful recovery in coking coal prices – at least for this year.”
