OREANDA-NEWS. March 12, 2010. BHP Billiton, one of the world's largest coking coal exporters, agreed on a 55% price rise (to USD200/t) of coking coal for the second quarter, via a 3-month contract with JFE Holdings, Japan’s second biggest steelmaker, reported the press-centre of OTKRITIE Financial Corporation.

View:  We anticipate the USD 200/t price to reflect the lower limit for the coking coal spot prices during 2Q10. Based on this, the net back price for Russian coking coal producers may reach USD 130/t.

In our model for Raspadskaya we use USD 110/t for FY10. The company said that it agreed on USD 110/t as the price for 1Q10. That said, we think Russian coking coal producers may negotiate USD 10- USD 15/t increase for 2Q10 contracts. We see an upside risk for our valuations for both Raspadskaya and Mechel.