Indonesian Coal Swaps Gain a Third day; China Prices Decline
Swaps prices gained a third day 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 added 10 cents to $65.60 a metric ton on a net-as- received basis yesterday, Ginga said in an e-mail today. The February contract rose 15 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 dropped 40 cents to $86.70 a ton on a net-as- received basis, the energy broker said. The February contract fell 30 cents to $85.60 a ton.
China’s benchmark price for domestic coal may average 650 yuan ($105) a ton this year, according to a report from Sanford C. Bernstein & Co. today. The fuel at Qinhuangdao port was unchanged at a range of 620 to 630 yuan a ton as of Jan. 20, according to data from the China Coal Transport and Distribution Association yesterday.
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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