The corridor of Backwater railway line has been disrupted

Number a global landmine acquired in recent years a size and strength as he may impose on customers contractual terms that he wants to. It provided evidence yesterday by announcing prévendu "a significant portion of its coal" Coke to several buyers located in Europe, India, China and the Japan. Stronger, Marius Kloppers group reached changes in both the method of calculation and duration of the reference price thus established with its customers. Now signed contracts will not run on a year, but on three months and won prize is stalled on current cash prices putting an end to their relative desynchronization.

These transformations in relations with the steel, metallurgical coal consumers, correspond, said BHP Billiton, the commitment made by the company to make more transparent and reactive to market conditions the formation of the prices of mineral resources. Way that his next goal is to reform also the large market for iron ore, also organized in two distinct segments, the spot market, to which Chinese steelmakers have more appeal, and the traditional market contract on annual basis to the March 31 deadline. The approach of the April 1, the negotiations between mine and Steelworkers accelerate. It is clear that structural changes to the market of metallurgical coal, BHP Billiton is the largest world exporter, will have a significant influence on their conduct.

Goldman Sachs JBWere has estimated at about 20 billion dollars per year the shortfall accumulated from three major exporters Australian iron ore (BHP Billiton); (Rio Tinto and Fortescue Metals) by selling their ores in a contractual framework and not on the spot market.

Chinese demand

Well aware of this, BHP Billiton has imposed to its clients a quarterly price of 200 dollars per ton of coal coke quality "premium", or an increase of 55 from the contract price for deliveries up to the end of the month. This price is only $ 15 less per tonne price spot FOB (free on board) average current. Qualified sources confide that BHP Billiton had proposed as an alternative an annual prize of $ 240 per tonne. Too expensive in the eyes of the steel to preserve the old rules. It is true that the mining giant benefited from a more favourable market environment.

Chinese demand is so strong that metallurgical coal for better invoice cash price has reached peaks of 240/250 $ per tonne. Request Chinese rose faced a point decline the offer because of torrential rains in Queensland, the greater area of the country's coal production. Several wells to open sky in the Bowen basin were flooded, cutting off partially or completely the extraction of the precious mineral fuel. The corridor of Backwater railway line has been disrupted.

These climatic conditions are likely to reduce the ability of Australian exporting over 10 million tons, consider economists in Royal Bank of Scotland (RBS). At the time, future contract prices would still advance of the order of 10 to 220 dollars per tonne. The pattern of a large trading Group anticipates, for its part, 275/300 dollars per tonne for the end of the year, near the summits of 2009 course.