According to sources, mining group Glencore Xstrata Plc and Japan's Tohoku Electric Power Co have settled an annual Australian thermal-coal import contract 17% lower than a year earlier.
The sources have said that the price for the fiscal year beginning 1 April was set at 67.80 per t, the same as an agreement last week between Tohoku and Rio Tinto, highlighting a growing supply excess for thermal coal worldwide.
Australia is by far the biggest supplier to Japan, accounting for 80.4 million t last year, or nearly three quarters of its thermal coal imports.
Annual contracts starting in April account for the majority of Australian thermal coal imports to Japan, covering around 50 million t.
International coal markets have been hit as China, the world's biggest producer and importer of the fuel, has curbed imports to support its own mines and as it battles pollution at home.
Other would-be buyers said they were disappointed with the price, as spot has recently plunged to below US$60 a t.
Asian benchmark thermal coal from Australia's Newcastle terminal has fallen around 10% this year, last settling at US$56.85 a t. The price has lost more than 60% since early 2011.
"The agreed price came a bit too high, but I guess Tohoku was obliged to accept it in order to secure a stable source of high-quality coal," one buyer said.
Edited from source by Joseph Green
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