Indonesian Power-Station Coal Swaps, Chinese Contracts Decline

Swaps prices fell for thermal coal 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 second quarter slid 5 cents to $64.90 a metric ton on a net-as-received basis yesterday, Ginga said in an e-mail today. The February contract dropped 15 cents to $63.85 a ton.

Contracts for coal with a heating value of 5,500 kilocalories a kilogram for shipment to South China in the second quarter fell 20 cents to $86 a ton on a net-as-received basis, the energy broker said. The February contract was 10 cents lower at $85.10 a ton.

Thermal coal at Australia’s Newcastle port, the benchmark price for Asian contracts, gained $1.05 or 1.2 percent to $91.70 a ton in the week ended Jan. 4, according to IHS McCloskey, a Petersfield, U.K.-based provider of coal data.

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.

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