Japan’s Tohoku, Glencore Australia settle Apr thermal coal benchmark at $94.75/mt FOB: sources
Japanese power utility Tohoku and Australian coal producer Glencore have finalized the FOB Newcastle, basis 6,300 kcal/kg GAR for thermal coal shipments under the April 2019-March 2020 term contracts at $94.75/mt , market sources familiar with the matter said.
Market sources were expecting April’s Japanese Reference Price to have been concluded at about mid-$90s/mt as demand has been relatively weak for 6,300 kcal/kg GAR Newcastle coal.
Tohoku is under the pressure from the Japanese power utilities to conclude the price on time, a market source said.
“Tohoku may decide on the price quickly learning from their mistakes in last April’s negotiations,” another trader said.
During the early stages of the talks, the spread between the opening bids and offers hovered around $89-$107/mt FOB Newcastle, basis 6,300 kcal/kg GAR, before narrowing gradually to $93-$104/mt, and eventually mid-$90s/mt, sources said.
Tohoku is one of Japan’s largest power utilities with four coal-fired power units and a combined installed capacity of 3,200 MW, according to the company’s 2018 annual report.
Glencore is one of Australia’s largest thermal coal producers with a thermal coal and semi-soft coal output of 72.7 million, the company’s 2018 annual report showed.