By Rhiannon Hoyle and David Winning
SYDNEY--South Korean steelmaker Posco (005490.SE) has agreed to
buy premium hard coking coal from two mines owned jointly by BHP
Billiton Ltd. (BHP) and Mitsubishi Corp. (8058.TO) at US$165 a
metric ton for delivery in the first quarter of next year, a person
familiar with the matter said Friday.
It represents a 3% decline on the US$170 a ton price settlement
for the previous quarter. Prices agreed between Posco and the
BHP-Mitsubishi Alliance, or BMA, set a benchmark that other steel
mills are likely to use in their own supply negotiations.
Coking coal prices have fallen sharply this year due to slack
demand in key Asian markets. China's economy has slipped to its
slowest rate since early 2009, exacerbating an oversupply of
steel.
Coal volumes will be shipped from the BMA's Peak Downs and
Saraji mines in Queensland state, the person told Dow Jones
Newswires.
Separately, Posco has also agreed to buy coal from the BMA's
Goonyella mine at a price of US$161 a ton for delivery in the
January-March period, the person said.
A spokeswoman for BHP declined to comment, saying it was the
Melbourne-based company's policy not to discuss pricing of the
commodities it sells.
-Write to Rhiannon Hoyle at rhiannon.hoyle@wsj.com and David
Winning at david.winning@wsj.com
-Robb M. Stewart contributed to this article.
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