OREANDA-NEWS. July 23, 2010. New World Resources released an update on 3Q10 prices. The figure for quarterly priced coking coal-- which represents 20% of the total expected sales volume for 2010 or approximately 1.1mt -- was set at EUR158/t, which is 17% higher than the average price in 2Q10. The average price agreed for coke sales during 3Q10 reached EUR362/t, which is 42% higher than in 2Q10, reported the press-centre of OTKRITIE Financial Corporation.

View: NWR previously announced that 80% of its coking coal (by tonnage) is sold on a Japanese Fiscal Year (JFY) basis. All coke is sold on a quarterly basis and all thermal coal prices are agreed for the calendar year. The average price for JFY 2010 coking coal sales and the price for FY10 thermal coal prices remain unchanged at EUR163/t and EUR65/t, respectively. Taking into account announced figures, NWR’s average coking coal price in 9M10 will amount to approximately EUR141/t, while the coke price will be about EUR271/t.

NWR’s thermal coal price for the 2010 calendar year was agreed at EUR65/t. We view this news as positive, and see an upside risk for our valuation since our model is based upon an average coking coal price of EUR105/t, a coke price of EUR165/t, and a thermal coal price of EUR80/t.

Valuation and Action: We reiterate our BUY rating for the stock and a target price of GBp1000.