NWR announced that it has reached agreements with its customers for coking coal and coke sales for the fourth calendar quarter of 2010. Coking coal: Quarterly priced coking coal, which represents 20% of the total expected sales volume for 2010, amounts to approximately 190kt for delivery in 4Q10 and comprises mostly semi-soft coking coal. The average price agreed for these deliveries was € 154 per tonne (-3% q/q). Coke: The average price agreed for coke sales during the fourth calendar quarter of 2010 was € 331 per tonne (-9% q/q, +122% y/y). The expected sales volume for the period is approximately 280kt. The price for JFY 2010 coking coal sales and thermal coal prices for the calendar year 2010 remain unchanged at an average of € 163 per tonne and € 65 per tonne, respectively. NWR remains on track to achieve its production and sales targets for the year. During calendar year 2010, the company expects to sell externally a total of approximately 5.5Mt of coking coal, 5Mt of thermal coal and 1.1Mt of coke. Production targets for calendar year 2010 are 11.5Mt of coal and 1Mt of coke. Our view: It was already claimed by the company and thus broadly expected on the market that quarterly prices should fall slightly in 4Q. The announced price for coking coal is slightly above our forecast (€154/t versus our estimate of €153/t) whereas the expected drop in coke prices is much higher than thought (€331/t versus expected €352/t). The drop in 4Q prices has a negligible impact on the quarterly results of the company as the 80% of total sales are fixed at contract price. Lower than expected coke prices should result in €5m lower revenue for 4Q. Next year outlook is more important at this point and negative price trend in 4Q might imply lower-than-expected coal contract prices going forward in 2011. In our earnings assumptions we forecast 5% y/y rise in coking coal (to US$ 200/t) and 12% y/y rise in thermal coal (to US$ 93/t) prices. Until now we see the assumption regarding coking coal as realistic whilst our estimates on thermal coal prices might be under pressure. Start of the new round of 2011 annual contract settlements by global producers might shed more light also in regard to NWR’s revenues in the coming year.