(EnergyAsia, September 5 2012, Wednesday) — Energy media groups Platts and Argus have expanded their coal pricing and reporting services.
Platts, a McGraw-Hill unit, said it has expanded its power sector pricing references for India, China and Asia with its launch of a new price assessment for Indonesia-loaded thermal coal cargoes.
Known as Platts Kalimantan 4200, the new assessment reflects the commercial and merchantable value of thermal coal loading free-on-board (FOB) in Kalimantan, Indonesia, one week to 45 days forward. It applies to coal with an energy-producing caloric value of 4200 kilocalories per kilogram, total sulfur content of 0.6%, typical ash content of 7% and total moisture of 35%, on an as-received basis. The minimum cargo size for consideration is 60,000 metric tons.
“With coal from Colombia and the US flooding into Asia, we believe the Kalimantan 4200 provides the Asia-Pacific market with a key in-region barometer of thermal coal values,” said James O’Connell, Platts senior managing editor, international coal.
“In particular, India and China, both with aggressive power plant builds underway, will likely find it an important valuation tool.”
Platts first introduced Indonesian-focused thermal coal assessments more than 10 years ago with the launch of its higher calorific Kalimantan 5900 and Kalimantan 5000 assessments.
According to Platts, both assessments are widely referenced by the international market and the Kalimantan 5900 forms part of Indonesia’s Harga Batubara Acuan (HBA), the government’s formula for pricing coal for domestic consumption.
India and China, though major producers of coal, are also the world’s largest importers of the commodity. Indonesia, Australia, the US, Colombia, Russia and South Africa are among the world’s top coal producers.
“Demand for low calorific thermal coal has surged to a 100 million-metric-ton market since the global financial crisis as countries with growing populations have chased after cheaper coal and more cost-effective electricity production,” said Mr O’Connell.
Lower calorific coals do not burn as clean as higher calorific coals, but they tend to be more economical, he added.
Platts introduced its first India-focused thermal coal assessments in August 2010, with the launch of its six CFR (cost and freight) India East and India West Coal and associated freight rate assessments, aimed at power producers, cement manufacturers, coal traders and ship brokers.
Argus said it has launched a dedicated coking coal service. The new daily report, Argus Coking Coal International, covers Europe, Asia-Pacific and the Americas and offers prices for key export and consuming markets, and freight rates for the main trading routes.
Coking coal demand and international trade are growing rapidly, fuelled by industrial expansion in China and India in particular. A swaps market is beginning to emerge around the Australian export market, as coking coal producers, trading firms and steel manufacturers seek risk management tools.
Australia is a key exporter to steel mills in Asia-Pacific, Europe and South America while the main Asian demand centres are India, China and Japan. Argus assesses delivered prices to China, as well as covering the domestic market in dollars and yuan, because there can be key differences between prices at the ports and local levels even after accounting for freight costs.
The FOB Hampton Roads assessments (for high and low-volatile matter) represent another key export centre, on the US east coast.
Reflecting Colombia’s increasingly important exporter role, Argus said it has launched the world’s first published index for Colombian coking coal export prices with the report. The report assesses the price of mid-volatile coal at export terminals along the Caribbean coast.
“We are glad to add coking coal to our range of energy and fertiliser reports. We have worked closely with the industry to develop a service that can meet the growing need for benchmark and risk management services,” Argus Media chairman and chief executive Adrian Binks said.