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Top BMA brands Peak Downs and Saraji have settled at $143 per tonne and Goonyella brand material has settled at $140 per tonne fob, European steel mill coking coal purchasers told Steel First.
A spokesman for BHP Billiton said the miner would not comment on price negotiations.
BMA started negotiations at levels of $142-145 per tonne fob, but met with strong resistance from buyers, according to sources.
“The negotiations started very early on and at higher levels,” a mill source said.
“One customer signed an agreement early because they had to buy or because they thought prices could increase and most people have followed. A lot of customers did not want to settle at these levels,” he said.
The settlement levels represent a $9-11 drop from benchmark price settlements concluded in the previous quarter.
Benchmark quarterly coking coal negotiations for Peak Downs and Saraji between BMA and Nippon Steel & Sumitomo Metal (NSSMC) settled at $152 per tonne in the fourth quarter of 2013, a $7 per tonne quarter-on-quarter rise.
First quarter 2014 price negotiations between NSSMC and BMA were reported as being discussed on the basis of around $144 per tonne for Peak Downs and Saraji material.
Quarterly benchmark negotiations for first quarter 2014 prices between BMA and Japanese mills are yet to conclude, sources told Steel First.
“BHP and Nippon Steel are still negotiating but the basis is $144 for Peak Downs and Saraji,” an Asian trader source told Steel First.
Spot coking coal prices for premium material sold cfr Jingtang port have weakened throughout the fourth quarter of 2014, dropping from levels of close to $160 per tonne in early November to just over $148 per tonne on December 18.
Some sources said they were surprised that BMA was able to settle at such high levels given the weakness in premium coking coal brand spot prices, but noted that while increases in freight rates had pushed up cfr prices, this would have had little impact on fob values.
Freight rates have rallied strongly in the past quarter, pushing up to 10-months highs in September and maintaining strength through to the end of the year.
London-based brokerage firm SSY quoted capesize rates on the Gladstone to China route at $15.90 per tonne and panamax rates on the Hay Point to Qingdao route as $14.95 on December 13, although sources said that rates had weakened by about $1 across the board by Wednesday.
BHP Billiton Mitsubishi Alliance (BMA) has concluded first quarter 2014 premium hard coking coal settlement negotiations with European mills at $140-143 per tonne fob Australia, according to market sources.