TOKYO -- Japanese steelmakers have negotiated a 9% lower price for coking coal for the January-March quarter of 2016, the sixth quarter in a row that suppliers have agreed to cuts.
The $81 per ton also marks the cheapest that coking coal has been for steelmakers since fiscal 2010.
Coming on the heels of the recent eighth quarterly decline in the agreed-to price for iron ore, these lower costs faced by steelmakers are bound to give main users like automakers ammunition to negotiate lower prices for their steel materials.
China is the world's biggest steel producer. But with the country's economic slowdown, its steelmakers have cut back on crude steel production for 10 straight months. Some smaller steelmakers have even halted production. But major suppliers of coking coal and iron ore continue to boost output, creating a global imbalance in supply and demand.
Earlier in December, Japanese steelmakers agreed to pay 8% less for iron ore in the January-March quarter.