* Nippon Steel sets Q1 coking coal benchmark with Glencore,
* Q1 price surges to $285/T, highest in about five years
* Increase follows higher spot prices
(Recasts with Nippon Steel's confirmation and details)
By Yuka Obayashi
TOKYO, Dec 13 Japan's biggest steelmaker Nippon
Steel said on Tuesday it has agreed with Glencore Plc
and Teck Resources Ltd on a coking coal
price for first quarter of 2017 supplies that is 43 percent
higher than the previous quarter.
The companies agreed on a price of $285 a tonne for supplies
of Australia's premium hard coking coal for the January-March
quarter next year, a Nippon Steel spokeswoman said, without
giving any details.
If other international steelmakers follow this price, it
would be the highest industry quarterly benchmark since the
fourth quarter of 2011.
Nippon Steel's agreements helps set a benchmark in Asia for
supplies of coking coal, used in steel-making, which has nearly
quadrupled in price over the past year as China cut production
and reduced output at some mines.
"We can't comment on any more details as we are still
negotiating with other suppliers," the Nippon spokeswoman said.
Nippon Steel's confirmation followed a statement from Teck
on Monday that it agreed with major customers on a benchmark
price of $285 a tonne for the first quarter of 2017 for coking
Glencore could not be immediately reached for comment.
In October, Nippon Steel and Peabody Energy set
the October-December coking coal contract benchmark at $200 a
Stronger steel production and a policy directive from
Beijing to limit domestic coal output has combined to send the
price of coking coal sharply higher as China sucked up every
available tonne from the seaborne market.
But these gains have been tempered in recent weeks as China,
the world's biggest coking coal producer, recently reversed
course and allowed mines to increase the number of days per year
that they operate, partly in an effort to tame prices.
The Australian premium coking coal futures index traded on
the Singapore Exchange has risen 254 percent this year.
It stood at $274.33 per tonne on Monday.
(Additional reporting by Oleg Vukmanovic in MILAN, Jim Regan in
SYDNEY; Editing by Richard Pullin and Christian Schmollinger)