Swaps contracts for lower-quality coal
from Indonesia, the world’s biggest exporter of the power-
station fuel, dropped 0.9 percent, according to Ginga Petroleum
Singapore Pte Ltd., an energy broker. Newcastle cargo prices
slid to the lowest in 18 months.
The June 2012 contract for Indonesian sub-bituminous coal
with a heating value of 4,900 kilocalories per kilogram net as
received basis declined 70 cents to $75.50 a metric ton,
according to data from Ginga. The swap for the third quarter of
2012 was 75 cents lower at $75.25 a ton.
A commodity swap is a financial agreement whereby a
floating, or spot, price is exchanged for a fixed rate over a
specified contract period.Coal with a heating value of 5,500 kilocalories per
kilogram net as received basis delivered to South China for June
fell 85 cents to $101.40 a ton, Ginga said. The swap for the
third quarter of 2012 was 50 cents lower at $101.50 a ton.
The price of thermal coal shipments at the Australian port
of Newcastle, the physical benchmark contract for Asia, dropped
below $100 a ton to the lowest since October 2010 because of
weakening demand from China and rising supply of the fuel from
countries including Colombia and the U.S.
Newcastle coal dropped $1.60, or 1.6 percent, to $99.95 a
metric ton in the week ended April 27, according to IHS
McCloskey, a Petersfield, U.K.-based provider of data. It
declined for a third week.
Sub-bituminous coal has a higher moisture level and lower
carbon content that reduces the heating value compared with
grades with a higher value such as the 6,700 kilocalories-per-
kilogram Newcastle grade.
Source: Bloomberg
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