Australian coal industry sources saidJapanese electricity utilities are demanding price cuts in
annual coal contract negotiations underway in Tokyo.
    But the sources said they were unable to substantiate
reports here that one of the largest steaming coal customers
&lt;Chugoku Electric Power Co Inc> threatened to stop taking
deliveries until new prices are set.
    Coal exporters want to maintain last year's 32 U.S. Dlrs a
tonne price, which expired at the end of Japan's fiscal year on
March 31, while the Japanese want to pay no more than the 27-28
U.S. Dlrs secured with China and South Africa.
    Ross McKinnon, general manager of &lt;Thiess Dampier Mitsui
Coal Pty Ltd>, which annually exports about one mln tonnes of
steaming coal to Japan, mainly to Chugoku, told Reuters he had
not been informed of any refusal to take shipments.
    McKinnon said he could not recall when a Japanese contract
had been settled before the previous one had expired, and said
"controlled leaks" were commonplace during talks.
    But Australian foreign currency markets took the reports
seriously enough for dealers to say it added nervousness to
trading, with the local dollar settling on 0.7080 U.S. Cents at
midsession against its 0.7120 opening.
    Coal was Australia's largest single export in the fiscal
year ended June 30, 1986 with shipments reaching 90.49 mln
tonnes worth 5.21 billion dlrs, or 15.9 pct of total exports.
    Japan is the largest customer for the crucial steaming coal
sector and took 14.97 mln tonnes of total exports of 43.3 mln
tonnes in calendar 1986.
    Sydney resources analyst Ian Story said the appreciation of
the Australian dollar against the U.S. Currency meant steaming
coal exporters were now receiving just 44.72 dlrs a tonne
against 52.42 dlrs when last year's contract was negotiated.
 REUTER
