Indonesian Coal Swaps Gain a Third Day, China Contracts Advance

Swaps prices advanced a third day for thermal coal from Indonesia, the world’s largest exporter of the fuel, according to Ginga Petroleum Singapore Pte. China contracts rose.

The swap for Indonesian sub-bituminous coal with a calorific value of 4,900 kilocalories a kilogram in the second quarter increased 35 cents to $66.10 a metric ton on a net-as-received basis yesterday, Ginga said in an e-mail today. The contract for February added 10 cents to $64.65 a ton.

Contracts for coal with a heating value of 5,500 kilocalories a kilogram for shipment to South China in the second quarter increased $1.15 to $87.70 a ton on a net-as-received basis, the energy broker said. The February contract rose 5 cents to $85.55 a ton.

Rain and destructive winds are lashing the eastern coast of Australia after floods caused by ex-tropical cyclone Oswald left four people dead in Queensland state, inundated thousands of homes and disrupted coal output. Xstrata Plc, the world’s biggest shipper of thermal coal, said its mines hadn’t been materially affected, while acknowledging rail disruptions in an e-mailed response to questions.

Newcastle Port Corp. operations are returning to normal after it advised five coal ships and one other vessel to move their anchorages further out to sea as a precaution at the weekend, spokesman Keith Powell said by telephone. The thermal-coal price at Newcastle, the benchmark for Asian contracts, surged in 2011 after Cyclone Yasi crimped output.

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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