The spot price for Australian coal exported through the Port of Newcastle reached $120 per metric ton (mt) during early July. According to the Economic Times, that’s the highest price since November 2012 and up by 140% from record lows in late 2015/early 2016. The price surge has been driven by strong demand from China and spot market buying by Japanese utilities. Japanese utilities traditionally purchase most of their coal under long-term deals, which they negotiate with suppliers. Negotiations between Tohoku Electric Power and Glencore broke down recently after they failed to reach an agreement. Traders said this forced Tohoku into the spot market to cover anticipated demand for the rest of the year.
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