BHP Billiton and Japanese steelmakers have agree to a drop of close to 60% in the price of coal for the contract year beginning in April, Reuters reports.
Japan’s two largest steel mills, Nippon Steel Corp. and JFE Holdings Inc., have agreed to pay $128 to $129 a metric ton for the coal, down 57% from the $300 a tonne that is currently paid.
The deal was made between the mills and BHP Billiton Mitsubishi Alliance, a joint venture between BHP and Japan’s Mitsubishi Corp.
The price drop comes as steelmakers in Asia and Europe cut their output as the global demand for steel falls.
According to the reports, the reduction in price is the first to annual contracts in the past six years, a period during which prices rose by as much as 500%.