Argus launches daily price assessments for swaps settled against the API 8™ benchmark
11 June 2014
Global energy and commodity price reporting agency Argus has introduced new daily price assessments for swaps settled against the Argus/IHS McCloskey API 8 index for 5,500 kcal/kg thermal coal delivered cfr south China.
Cleared volumes of derivatives settled against the API 8 coal benchmark rose above 12mn t in 2013, the first full year of cleared trade. More than 2mn t traded in both November and December, and a monthly record of 2.79mn t was achieved in March this year. Liquidity is likely to continue to increase as even more of the market opts for the API 8 price as the most appropriate basis for Asia-Pacific coal derivatives, especially with Hong Kong-based exchange HKEx due to join US exchanges CME, and Ice and Singapore’s SGX in offering clearing later this year.
China’s position as the world’s biggest coal importer underpins the market for derivatives settled against the API 8 price. The country’s thermal coal imports rose by 6pc to a record 208mn t in 2013. Imports of bituminous coal with a calorific value of 5,000-6,000 kcal/kg have been growing more strongly compared with other grades, increasing by 12pc to 109mn t in 2013, with imports of this grade from Australia rising by 32pc to 51.3mn t and Indonesian exports to China increasing by 16.4pc to 39mn t.
By providing greater visibility on price trends, the daily assessment of prices for swaps settled against the API 8 benchmark aims to assist Chinese utilities, trading firms and coal producers in their hedging and price risk management strategies.
“Argus has been providing reliable coal price information for the Asia-Pacific coal market for many years. We are pleased to offer subscribers greater transparency in Asia-Pacific’s fastest growing coal derivative markets,” Argus chairman and chief executive Adrian Binks said.
The new assessments are published daily in Argus Coal Daily International, a global report that covers over 100 coal prices in key markets, subscribed to by almost 300 companies in 50 countries around the world.
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