Why China Is Ready to Pay a Premium for Metallurgical Coal
Kelvin Schulle submits:
It is believed that China is ready to accept a 40% jump in iron ore prices in 2010 after lengthy negotiation between BH Billiton (BHP), VALE and Rio Tinto (RTP). Meanwhile, the negotiations on metallurgical coal pricing have already started between China and big coal producers. The initial price target is $200, raised from $129 last year. This is almost a 55% jump.
Goldman Sachs also predicted a $200 price target for metallurgical coal in 2010. For BH Billiton and other western producers, more pricing power is expected for metallurgical coal as China simply does not have the high quality coal that is needed for steel production.
Investing, Long Term Investment, stock market | admin March 24, 2010
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