BHP Billiton (ASX:BHP) appears to be winning the war on how the steel industry buys its raw materials following news that Brazilian miner Vale has backed the miner on shorter term contracts.
Last week, BHP agreed to a coking-coal supply agreement with Japan’s JFE Holdings – the first deal that will run for three months.
Most coking coal is supplied on annual contracts and based on a fixed price.
BHP is seeking deals that cover shorter periods and plans the same for the larger iron ore market as prices of commodities climb on Chinese demand.
Vale is said to have asked Japanese steel mills for more than a 90% increase if they wanted to lock in yearly contracts.
Looking at net profit, for 2009 BHP Billiton posted a $7.2 billion result.