Indonesian Thermal Coal Swaps Advance; China Prices Decline

Swaps prices rose for thermal coal from Indonesia, the world’s largest exporter of the power-station fuel, 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 first quarter of 2013 climbed 15 cents to $62.50 a metric ton on a net-as-received basis yesterday, Ginga said in an e-mail today. The January contract gained 15 cents to $62.50 a ton.

Contracts for coal with a heating value of 5,500 kilocalories a kilogram for shipment to South China in the first quarter declined 25 cents to $84.05 a ton on a net-as-received basis, the energy broker said. The swap for January also fell 25 cents to $84.05.

Thermal coal price at Australia’s Newcastle port, the benchmark for Asian contracts, rose $3.55, or 4.1 percent, to $90.65 a ton in the week ended Dec. 7, according to IHS McCloskey, a Petersfield, U.K.-based provider of coal data. The increase for a seventh week marked the longest streak of gains since February.

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 kilocalories of less than 6,100 per kilogram, according to the Indonesian energy ministry.

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