Reuters reported that Japanese steelmakers oppose miner BHP Billiton attempt to switch to quarterly contracts from annual deals for supplying coal, as the change would not suit their clients in manufacturing.
The Japan Metal Daily recently reported that BHP Billiton one of the world's biggest coal producers was seeking a quarterly contract on coal in talks with Japanese steelmakers. Their current annual contract expires on March 31st.
Analysts say a quarterly contract will make it hard for Japanese steelmakers to fully pass on costs to user companies like carmakers and shipbuilders, who set sales prices annually.
Mr Shoji Muneoka chairman of the Japan Iron and Steel Federation said "We've heard there is a miner who favors a shorter contract period and that some Chinese steelmakers have not rejected the idea."
He said that "Chinese steelmakers produce a lot of construction steel, in which quarterly price changes are easier, but Japanese steelmakers supply 60% to 70% of their product to manufacturers, who wouldn't like quarterly cost fluctuations. We hope the miner honors the market situation, which is different from country to country."