Wed,19 Oct 2011
Bloomberg reported that Xstrata Plc which achieved record output of power station coal in the third quarter agreed on annual contracts with long term Japanese customers at prices that exceeded analysts’ expectations.
The Zug Switzerland based company said in a statement that Xstrata settled coal prices at USD 126.50 per tonne from October 1 compared with USD 129.85 on April 1.
Liberum Capital Ltd said "Considering recent bearishness around commodity prices we consider this an amazing settlement for Xstrata."
The Standard & Poor GSCI Spot Index of 24 raw materials has dropped 17% from this year high in April. Copper for three month delivery on the London Metal Exchange has slumped 28% from a record as economic growth in China the world biggest user of industrial metals slows.
Mr Rob Clifford a London based analyst at Deutsche Bank AG said "The third quarter 2011 marked the end of recent weather- related production impacts on the coal business. On the other side of the ledger, copper production was hampered by more issues at Collahuasi."
He said that "With the stock trading below our price target, we maintain our buy' recommendation. He has a share-price target of 1,758 pence for Xstrata."
Production of coking coal used in steelmaking increased by 26%. Total output including semi-soft coal rose 7.8% to 23.6 million tons.
(Sourced from Bloomberg)
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