By Ben Sharples

May 4 (Bloomberg) -- Centennial Coal Co., an Australian producer of coal used in steelmaking, says global supply remains “fragile” and predicted contract prices will rise in the second quarter.

Japanese steel mills in March agreed to pay BHP Billiton Ltd., Rio Tinto Group and Teck Resources Ltd. about $200 a metric ton for a three-month coking coal contract starting April 1. That’s a 55 percent increase on the contract for the year ending March 31, UBS AG said in a March 18 note.

Demand for steelmaking coal is rising as the global industry recovers, Tony Macko, Centennial’s general manager of corporate affairs, said in a presentation filed to the Australian stock exchange today. Supplies of thermal coal, burned by power stations, remain “tight,” he said.

--Editors: John Viljoen, Ryan Woo.

To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net

To contact the editor responsible for this story: Clyde Russell in Singapore at crussell7@bloomberg.net

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