Thermal Coal Swaps Unchanged for Indonesia, China Contracts

Swaps prices were unchanged for thermal coal for loading in the first quarter from Indonesia, the world’s largest exporter of the 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 held at $63.60 a metric ton on a net-as-received basis on Dec. 31, Ginga said in an e-mail today. The January contract rose 10 cents to $63.25.

Contracts for coal with a heating value of 5,500 kilocalories a kilogram for shipment to South China in the first quarter were unchanged at $85.10 a ton on a net-as-received basis, the energy broker said. The January contract remained at $84.70 a ton.

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.