Japanese utilities and global mining giant Glencore have settled an Australian thermal coal import contract for April 2018-March 2019 at $US110 ($A151) a tonne, according to several people with knowledge of the matter.
The deals were struck between Glencore and Japanese utilities such as Shikoku Electric, Chugoku Electric and Kansai Electric after bilateral talks, a source at a Japanese coal buyer said, requesting anonymity as he was not allowed to speak in public about commercial deals.
Glencore did not respond to a request for comment.
A Chugoku Electric spokesman confirmed the utility struck some annual contracts at $US110 a tonne with Glencore, but said other deals were agreed at different levels or index-linked prices.
Shikoku Electric said it settled the April-March contract with Glencore last month but declined to disclose the price. Kansai Electric declined to comment.
“We’ve agreed with Glencore at $US110 per tonne for the April-March contract late last month,” said another source at a utility directly involved in the talks, also declining to be named.
A trader with a major commodity merchant also confirmed the deals.
The deal marks a breakthrough after Japan’s Tohoku Electric and Glencore, the world’s biggest exporter of seaborne thermal coal, failed earlier this year to agree an annual supply deal that has in the past been used as an industry benchmark.
The contractual price came in nearly 30 per cent higher than an annual supply price a year earlier, and 16 per cent above a deal for October 2017-September 2018, reflecting a tighter global market for the world’s dominant power generation fuel.
Australian spot thermal coal cargo prices have hit several six-year highs in recent months, and at $US120 per tonne remain a third above this year’s lows in April, pushed up by a summer heatwave across the northern hemisphere as well as output cuts in China, the world’s biggest consumer of coal.