BHP Billiton has reached an agreement with Japanese steel makers for a seven percent cut in the price of coking coal.
This agreement will run until the end of December.
The cost of the coking coal was put at $209 per ton for the October – December period, a decline from $225 from the July- September period.
This drop in price is the first since prices have been set to quarterly adjustments, and follows on from Brazilian mining giant Vale announcing a drop of 10% in its iron ore prices.
The overall price cuts have been due to a slow down in demand from Chinese and Japanese steel makers.
While the current steel production slow down is predicted to be only short-term, the market is unsure of whether prices will continue to fall.