Mechel Signs Long-Term Coal Deal With Asian Steelmaker
09/03/2015 - Russian coal and steel producer Mechel OAO has signed a long-term agreement to provide metallurgical coal to a Japanese steelmaker, the company has announced.
Under the three-year agreement with JFE Steel Corp., Mechel will annually supply up to 1 million metric tons of washed coal through its Yakutugol subsidiary and its Elga coal deposit.
Mechel sells coal to other Japanese steelmakers, but the agreement with JFE is its first of that length, the company said.
“We consider this three-year agreement with JFE Steel as an important step in implementing our strategy of diversifying our sales and strengthening ties with Asia Pacific's key steelmakers,” said Mechel Mining Management Co. CEO Pavel Shtark in a statement.
“Considering global commodity markets' volatility, we make it our priority to preserve our client base and ensure a stable flow of orders for our Group's coal producers," he said.
Mechel began producing washed coal at Elga in 2012. And in 2013, JFE Steel became the first to buy a trial export batch. After testing the coal, JFE expressed an interest in forming a longer-term relationship, Mechel said.
Platts reported that the Elga coal typically has a maximum fluidity of 12,000 dial divisions per minute. Fluidity is a measure of a coal’s ability to form quality coke.
Platts said that Asian steelmakers are in the market for more sources of high-fluidity coking coal, due to a series of mine closures this year.
Mechel sells coal to other Japanese steelmakers, but the agreement with JFE is its first of that length, the company said.
“We consider this three-year agreement with JFE Steel as an important step in implementing our strategy of diversifying our sales and strengthening ties with Asia Pacific's key steelmakers,” said Mechel Mining Management Co. CEO Pavel Shtark in a statement.
“Considering global commodity markets' volatility, we make it our priority to preserve our client base and ensure a stable flow of orders for our Group's coal producers," he said.
Mechel began producing washed coal at Elga in 2012. And in 2013, JFE Steel became the first to buy a trial export batch. After testing the coal, JFE expressed an interest in forming a longer-term relationship, Mechel said.
Platts reported that the Elga coal typically has a maximum fluidity of 12,000 dial divisions per minute. Fluidity is a measure of a coal’s ability to form quality coke.
Platts said that Asian steelmakers are in the market for more sources of high-fluidity coking coal, due to a series of mine closures this year.
