China coal cuts to spell pain for Japan steelmakers as prices soar

Hong Kong

JAPAN's steelmakers are set to pay for China's effort to manage its coal industry as a surge in metallurgical prices flows through to quarterly supply contracts.

Spot hard coking coal has more than doubled this year to trade near US$200 a tonne, and the gain will be taken into consideration when Japanese steel mills and miners negotiate a supply contract for the fourth quarter. A deal may be agreed at US$140, according to Wood Mackenzie Ltd, 51 per cent higher than the third-quarter accord and the highest since early 2014.