Indonesian Coal Swaps Snap Three-Day Gain; China Prices Steady

Swaps prices fell for thermal coal from Indonesia, the world’s largest exporter of the fuel, snapping three days of gains, 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 10 cents to $64.80 a metric ton on a net-as-received basis yesterday, Ginga said in an e-mail today. The February contract dropped 15 cents to $63.75 a ton.

Contracts for coal with a heating value of 5,500 kilocalories a kilogram for shipment to South China in the second quarter held at $87 a ton on a net-as-received basis, the energy broker said. The February contract fell 10 cents to $85.80 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.

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