More met coal price hikes

London (Platts)--7Jul2004

Metallurgical coal buyers should expect massive price increases for 2005,
although contract prices could settle at levels lower than prevailing spot
prices, an official for an Australian producer told Platts. Contract prices
for 2005 could go a long way and still be significantly under the spot
business, the Australian source added. The price increases will be so massive,
he said.

Quoting published reports, the Australian source said coking coal was recently
offered at $160/mt FOB in India for material from Xstratas Oaky Creek, but no
tonnage was awarded as the price was deemed too high. Since no tonnage was
awarded, I would imagine the spot price is less than that, the Australian
source said.

Asian source estimated that if hard coking coal were available, it could
easily go in the spot market for $140/mt FOB. If you look at the fact that a
long-term price will be less than the spot, I would imagine that the
difference is somewhere around $80 a tonne, the Australian source said.

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