US-based exchange the CME Group initiated trading today of its Illinois basin coal futures contract.
The physically delivered contract is available for trading on various group platforms. It has a contract size of 1,750 short tons (1,588 metric tonnes) and specifications include typical heat content of 11,500 Btu/lb, maximum 3.15pc sulfur, no more than 12pc ash and up to 0.35pc chlorine.
Market participants hope a valid Illinois basin coal contract will help inject more liquidity into daily US coal trading. Argus launched daily over-the-counter assessments of a similar Illinois basin product earlier this month.
Illinois basin coal production has grown by 29pc since 2009, to 132.2mn st last year, according to Mine Safety and Health Administration figures. The basin's share of total US production has increased over the same period, to 13.4pc last year from 9.6pc in 2009. The Energy Information Administration expects the basin's output share to reach 20pc by 2040, as the growth continues at a relatively steady pace while other basins trail off.
The CME contract also has a maximum 14pc moisture and loads on the Ohio river between mileposts 776 and 918.
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