Indonesia Coal Swaps Rise a Fifth Day; China Prices Advance

Swaps prices advanced for a fifth day for thermal coal from Indonesia, the world’s largest exporter of the fuel for power stations, 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 rose 60 cents to $64.15 a metric ton on a net-as-received basis yesterday, Ginga said in an e-mail today. The January contract also climbed 60 cents to $64.15 a ton.

Contracts for coal with a heating value of 5,500 kilocalories a kilogram for shipment to South China in the first quarter increased $1.10 to $85.10 a ton on a net-as-received basis, the energy broker said. The swap for January advanced $1.45 to $85.10.

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.

— With assistance by Jing Yang

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