(Bloomberg) -- Coal miners are set to win the highest supply contract in six years from Japanese utilities after demand drove spot prices higher, according to Australia’s commodity forecaster.
Japan’s utilities will probably pay $100 a metric ton for annual supplies during the period from April to March, the Department of Industry, Innovation and Science said in a quarterly report. That’s 18 percent higher than the deal in 2017 and the most since 2012. Spot prices climbed earlier in the year on strong demand as buyers snapped up cargoes amid supply concerns, the forecaster said.
“Going forward, strong growth in demand in emerging Asia will largely offset softer demand in the OECD,” the department said. “Western nations appear likely to continue to push to phase down their thermal coal use in favor of renewables and gas, the latter both for heating and power generation.”
Spot Newcastle coal capped its best quarter in six years after a winter freeze across Asia boosted heating demand and sapped supplies. The agreed April-March deal between Japan’s utilities and miners will establish a benchmark for the region that other buyers and sellers will follow.
Recent annual thermal coal contract prices:
| 2017 | $85 |
| 2016 | $62 |
| 2015 | $67.80 |
| 2014 | $82 |
| 2013 | $95 |
| 2012 | $115 |