BHP Billiton and Rio Tinto may have to cut their contract prices for coking coal by up to 33% in 2009 due to falling demand from steelmakers, according to a survey conducted by Bloomberg.com.
The median forecast by a panel of nine analysts surveyed by Bloomberg saw the price of coal predicted to drop from the current US$300 a metric tonne to US$200 a tonne by April next year.
The price forecasts varied from US$140 to US$305 a tonne.
Both BHP Billiton and Rio Tinto declined to comment when contacted by MINING DAILY.
According to the Australian Bureau of Statistics, coking coal is Australia’s most significant major export, totalling $6.2 billion from 1.3 billion tonnes for 2007/2008 in NSW alone.
Each of the miners recorded a slump in their share prices, with BHP falling 3.5% to $29.91 and Rio down 4.9% to $44.30 at the beginning of the week.
According to a report by Macquarie Group analyst Jim Lennon, the financial crisis is hurting demand across the board.
“This downturn is taking place in every single region of the world, highlighting the global synchronized nature of the slowdown and has been devastating for the raw materials suppliers to the steel industry,” he said.
“Demand has crashed everywhere and for every product.”