Mongolian Mining Corp shifts to monthly talks due to volatile prices
Mongolian Mining Corp (MMC) has been negotiating coking coal prices with its customers on a monthly basis since the second half of last year due to higher price volatility.
Paragraph entered by Atlantic migration, in order for SteelFirst articles to display correctly on Metal Bulletin.
Previously, the Mongolian miner used a quarterly pricing mechanism, chief marketing officer Enkhtuvshin Dashtseren told delegates at the second Coaltrans Asia Coal Trading Forum in Singapore on Wednesday February 20.
Spot prices for premium hard coking coal plummeted by almost 40% to $140 per tonne fob Australia in September 2012 from a high of $226.50 per tonne in June, according to energy pricing agency Platts.
The decline in coking coal prices took a toll on MMC, which said last month that it expected to report an operating loss for the year ended December 31 after a preliminary review of its results.
Landlocked Mongolia has been trying to sell coking coal to countries other than the neighbouring China but logistics remains its biggest challenge.
Last year, MMC sent trial shipments to the seaborne market in a move to diversify its customer base, achieving an average price of $236.50 per tonne fob Russian Far East port Nakhodka.
During the first six months of 2012, the company sold a total of 1.2 million tonnes of washed hard coking coal to China.
Dashtseren said the miner’s washing plant would have a washing capacity of 15 million tpy by the end of 2013.