TOKYO (Reuters) - Japan’s Ministry of Economy, Trade and Industry (METI) is seeking to determine whether clauses in long-term coal contracts that bar buyers from diverting and reselling cargoes are limiting trade, Bloomberg News reported on Friday, citing sources familiar with the matter.
Destination clauses limit where cargoes can be delivered and prevent companies from selling excess coal to third parties in other places. Japan’s antitrust regulator in June ruled that new long-term LNG contracts signed with Japanese buyers could not have destination restrictions.
METI is examining whether there’s a need to shift to spot and short-term trading from long-term coal contracts, the report said, adding that it had held a meeting with several firms and plans to draft an interim report on the coal market in February.
Businesses invited to the meeting included Tohoku Electric Power Co, Nippon Steel & Sumitomo Metal, JFE Steel, Mitsui & Co and JERA Co, the fuel-buying joint venture of Tokyo Electric Power and Chubu Electric Power, the report said.
A METI official declined to comment on the report.
The meeting also raised concerns about increasing concentration of coal assets in fewer hands, such as Glencore.
Reporting by Osamu Tsukimori; Editing by David Goodman