(EnergyAsia, May 9 2013, Thursday) — Platts, a leading source of benchmark price assessments for energy, petrochemical and metal products, said it has launched two new thermal coal price assessments for China to serve the domestic market and Asia.
The CFR South China assessment covers the seaborne spot trade in physical open-thermal coal including the freight cost out of Australia, Colombia, Indonesia, Russia and South Africa delivered within a 15- to 60-day forward period to southern ports in China.
The FOB Qinhuangdao assessment was launched following extensive consultation with participants in the China-based market, including international and domestic traders, coal producers, power generation companies, end-users and other industry players, said Platts.
The new assessments capture physical spot prices for domestic and imported thermal coal with a calorific value of 5,500 kilocalories per kilogram (kcal/kg) on a net-as-received basis.
Platts said the new assessments are based on all-day market monitoring and data collection of transactions, bids, offers and other information from market participants in the open markets. Assessments in US dollars per metric ton (mt) reflect values at the close of the physical trading day, local time.
“The two price assessments are designed to complement each other by providing a quick and straightforward way for traders and other interested parties to compare the prices of domestic and imported thermal coal in the Chinese market and immediately determine whether there is price arbitrage advantages favoring one type or the other,” said James O’Connell, Editor-in-Chief of Platts Coal Trader International.
“We believe that providing a consistent independent source of spot price information supports better decision making regarding cargo trade, arbitrage between regions, storing and transporting thermal coal to markets, investment in infrastructure projects and optimal production rates, processing margins and consumption levels.”
According to Platts, China’s domestic thermal coal production has quadrupled since 2002 to around four billion metric tons in 2012, all of it consumed domestically by the nation’s ever-expanding power plant system.
Over the last decade, China has added more than 350 gigawatts of coal-fired power generation capacity. In the last five years, China has turned from a coal-producing nation supplying Japan and other Asian nations, to a voracious consumer of imported coal from suppliers such as Australia, Indonesia, South Africa, Russia, Colombia and the US.