* Japanese steel makers face resistance from Chinese steel
* Japanese steel mills trim demand for coal
* Yancoal Australia hopes to release strategy review by
(Adds Yancoal comments)
PERTH, Nov 13 Yancoal Australia said on
Tuesday that Japanese customers have been turning down coal from
the company as a result of the Sino-Japanese territorial row in
the East China Sea.
Yancoal, controlled by China's Yanzhou Coal Mining Co
, sells its metallurgical and thermal coal into
China, Taiwan, South Korea and Japan.
"We are seeing a direct impact which we believe is part of
the Sino-Japanese issue," Yancoal Managing Director Murray
Bailey told a resources conference.
He said Japanese steel makers were facing resistance from
steel buyers in China, so those steel makers were trying to
limit the amoung of coal they take from Yancoal and other
"Clearly, with the China growth story, a lot of those
companies in Japan rely on Chinese customers. So anecdotally we
are seeing a modest moderating in physical demand from some of
our customers," Bailey told Reuters on the sidelines of the
"They are saying because their exports to China have slowed
down they are inferring that it is part of that souring
relationship over the disputed islands," Bailey said, stressing
that the information was anecdotal.
Yancoal has said it would book a loss for the September
quarter as weak demand forced it to sell some metallurgical coal
into the cheaper thermal coal market and resulted in it having
to pay for port capacity that it was unable to use.
Some analysts expect it to book a loss for the whole second
half of the year due to the weak coal market and high costs and
expect it to shelve some expansion plans that it had outlined
when it merged with Gloucester Coal earlier this year.
The company, the fifth biggest coal producer in Australia
behind the majors, is due to complete a strategy review this
month, and Bailey said he hoped to be able to release the
outcomes to the market before Christmas.
(Reporting by Rebekah Kebede and Sonali Paul; Editing by Kim