Indonesian Power-Station Coal Swaps Gain; China Contracts Rise

Swaps prices gained for thermal coal loading from Indonesia, the world’s largest exporter, according to Ginga Petroleum Singapore Pte.

The contract for Indonesian sub-bituminous coal with a calorific value of 4,900 kilocalories a kilogram in the second quarter rose 30 cents to $66.60 a metric ton on a net-as-received basis yesterday, Ginga said in an e-mail today. The March contract increased 25 cents to $65.25 a ton.

Prices of Indonesian thermal coal shipments gained last week after flooding in Australia’s Queensland state disrupted supply in January. Coal with a heating value of 4,500 kilocalories a kilogram and maximum 1 percent sulfur averaged $49 a ton in the week ended Deb. 1, compared with $45 a ton the previous week, according to the median forecast of six traders surveyed by Bloomberg News yesterday.

Contracts for coal with a heating value of 5,500 kilocalories a kilogram for shipment to South China in the second quarter added 20 cents to $87.20 a ton, the energy broker said. The swap for March held at $85.85 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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