Indonesian Coal Swaps Advance for a Third day; China Prices Gain

Swaps prices for thermal coal from Indonesia, the world’s largest exporter of the fuel, rose for a third day, according to Ginga Petroleum Singapore Pte.

The swap for Indonesian sub-bituminous coal with a calorific value of 4,900 kilocalories a kilogram in the second quarter climbed 10 cents to $64.90 a metric ton on a net-as- received basis yesterday, Ginga said in an e-mail today. The February contract was unchanged at $63.90 a ton.

Contracts for coal with a heating value of 5,500 kilocalories a kilogram for shipment to South China in the second quarter rose 10 cents to $87 a ton on a net-as-received basis, the energy broker said. The February contract gained 10 cents to $85.90 a ton.

Gains in seaborne thermal coal prices may be limited through 2017 because the Chinese market is unlikely to tighten significantly, Goldman Sachs Group Inc. said in an e-mailed report today. Spot thermal coal price at Australia’s Newcastle port, the benchmark for Asian contracts, will trade in range of $90 to $100 a ton through 2017, according to the bank’s forecast.

A commodity swap is a financial agreement whereby a floating price is exchanged for a fixed rate over a specified contract period. About 60 percent of Indonesia’s coal is classified as sub-bituminous. Higher moisture levels and a lower carbon content reduce the heating value compared with better- quality stock. Sub-bit coal has fewer than 6,100 kilocalories per kilogram, according to the Indonesian energy ministry.

To contact the reporter on this story: Fitri Wulandari in Jakarta at

To contact the editor responsible for this story: Alexander Kwiatkowski at

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.