May 18, 2020 / 4:10 AM / 2 months ago

Glencore, Tohoku Electric set coal contract price at $68.75/T -Nikkei

TOKYO, May 18 (Reuters) - Global miner Glencore Plc and Japan’s Tohoku Electric Power agreed on a price of $68.75 per tonne for supplies of thermal coal from Australia for the year through March 2021, the Nikkei business daily reported on Saturday.

The Glencore-Tohoku price, which serves as an industry benchmark for supplies of seaborne thermal coal in Asia, was 27% lower than a price agreed a year earlier.

Tohoku declined to comment on the Nikkei report, and Glencore could not immediately be reached.

The sharp decline from a year earlier came as the coronavirus pandemic choked off global industry activity, slashing demand for thermal coal.

The weekly index for cargoes of higher-rank thermal coal from Australia’s Newcastle Port, mainly destined for Japan, South Korea and China, dropped to $52.79 a tonne in the week to April 26, lowest since June 2016, and down 24% from this year’s peak of $69.59 in mid-January.

Japan is one of the world’s biggest importers of thermal coal, taking about 111 million tonnes last year. Australia supplied nearly 70 percent of those imports, according to customs data from Japan’s Ministry of Finance.

Reporting by Yuka Obayashi; Editing by Tom Hogue

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