COKING COAL TRADE AT A STANDSTILL

COKING COAL TRADE AT A STANDSTILL

International buyers and sellers of coking coal are at a standoff - and market activity nearly at a standstill.

U.S., Australian and Canadian suppliers are waiting for the Japanese and Brazilian steel industries to accede to demands for healthy price increases in 1988 contracts.The Japanese and Brazilians are waiting for a major supplier to break ranks and accept a rollover on 1987 prices. European coking coal consumers are said to be watching and waiting.

The inertia is having an impact on the North American market, too.

Paul Wing, who handles coal traffic at Thunder Bay Terminals Ltd., Thunder Bay, Ontario, said it's too early to predict how much Western Canadian coal his company will load this year for Eastern Canadian and Chicago area steel

mills.

He explained the mills are waiting to see what price settlements will be reached in Japan.

The Japanese, who bought coal under 1987 contracts at prices in the mid- $40s a metric ton, are being asked for increases of up to $9 a metric ton

from Canadian suppliers and $4-$6 a metric ton from the Australians, according to U.S. producers and traders.

The Canadian price objective is based on $5 a metric ton to recover last year's cut, plus $4 to account for the exchange rate disadvantages.

Traders also noted that Australian exporters faced with rising ocean freight rates are seeking delivered price increases of up to $7 or $8 a metric ton in discussions with European customers.

Also watching the negotiations in Japan are the Brazilians. The national steel company, Siderbras, reached no settlement in contract talks with U.S. suppliers Peabody Coal Co. and U.S. Steel Mining Co. last week.

Some U.S. traders predict U.S. exporters will settle a price in Brazil first, then Japan; others say it will be the other way around. Last year prices agreements were reached first in Brazil.

One trader contends the market isn't so quiet. He said U.S. companies are fixing prompt shipments of coking coal needed by Japan's steel industry at premium prices.

He indicated some deals were swung at a recent Pacific Rim coal trade conference in Beijing, but declined to provide specifics.