Further to the ASX release dated 11 February 2022, Bowen Coking Coal Ltd has agreed initial unconditional coal sale contracts with two Tier 1 Asian end users, both of which are multi-billion dollar steel producers (Posco and Formosa), for a fixed volume of 250 000 t. 40 000 t are scheduled for delivery within 2Q22 with the remainder evenly spread over 2H22.
Under the contracts, pricing is a combination of index based and fixed price (the latter agreed in accordance with usual market practice) and expected to settle in line with reported ULV PCI pricing over the related period. The laycan for the 40 000 t in 2Q22 have been confirmed as between late May 2022 and mid-June 2022. Laycans for the balance of the tonnage deliveries will be confirmed in due course.
The company clarifies that its reference to ultra-low volatile PCI (Platts symbol MCLVA00) in its 11 February 2022 release was included as contextual information regarding the current pricing environment for ULV PCI coal. For further context, the company also notes the quality of LV PCI to be sourced from Bluff mine against the Platts reference.
The sale contracts are significant as they represent the first coal sold from the Bluff Project by the company and represent market recognition of the quality of product offered by this project.
The company has a 50% interest in a joint venture with an entity controlled by Matthew Latimore, President and Founder of M Resources Trading Pty Ltd (M Res) for the marketing of its coal products. This arrangement was approved by shareholders at a general meeting of the company on 17 June 2020.
Read the article online at: https://www.worldcoal.com/coal/17022022/bowen-coking-coal-provides-bluff-sales-contracts-update/