A report published in a Japanese daily has indicated on Wednesday that BHP Billiton Ltd agreed to cut by seven percent coking coal prices that the company is set to ship into Japan for the last quarter of 2010.

The Nikkei Business Daily said that Japanese steelmakers were able to reach an agreement with the giant mining company to set the October-December coking coal price at $209, coming from the $225 price standard in July-September period.

The paper said that the deal marked the first time that coking coal prices were slashed since the mining industry moved to a quarterly mode of determining prices in April, which it said could be largely motivated by reduced demands from China.

The business daily said that China, which manufactures up to 50 percent of the world's steel, temporarily reduced its steel production to re-calibrate the country's inventories.

However, Nikkei noted that it is still unsure if the price cuts implemented by BHP would be sustained in the following year as experts were anticipating that China would ramp up its production once its inventory adjustments were done.

The Japanese newspaper also reported that Brazil-based Vale, the world's biggest iron ore producer, had floated plans to slash by 10 percent it October-December price offerings to Japanese steelmaker, which experts said could be a major factor on BHP's move.