The recently launched ICI 4 coal derivatives market achieved a landmark last month, as the total volume traded reached 1mn t, global energy and commodity price reporting agency Argus announced. This is a significant achievement, coming just six months after the clearing of futures settled against the index became available following the listing of ICI 4 on the CME’s Nymex exchange.

The physical market for low-calorific value Indonesian coal is growing rapidly. An estimated 120mn t/yr is being shipped from Indonesia for the export market, and an increasing proportion of this is being sold on an index-linked basis as market participants seek to manage Indonesian coal price risk. This has increased the need for effective risk management tools, and ICI 4 derivatives have become integral to meeting this hedging requirement.

Argus Media chairman and chief executive Adrian Binks said: “Passing this milestone in traded volumes proves that this contract has been widely accepted as an essential risk management tool for the growing Indonesian and wider Asia-Pacific market. Argus is delighted to have brought price transparency to the Indonesian coal markets.”

The ICI 4 index was launched jointly by Argus and PT Coalindo Energy in August 2008 and quickly gained the confidence of the coal trading community as a reliable, independent price assessment. The methodology is available here.

About Argus Media

Argus is an independent media organisation with almost 1,100 staff. It is headquartered in London and has 26 offices in the world’s principal commodity trading and production centres. Argus produces price assessments and analysis of international energy and other commodity markets and offers bespoke consulting services and industry-leading conferences.

Companies in 140 countries around the world use Argus data to index physical trade and as benchmarks in financial derivative markets as well as for analysis and planning purposes.

Argus was founded in 1970 and is a privately held UK-registered company. It is owned by employee shareholders, global growth equity firm General Atlantic and Hg, the specialist software and technology services investor.

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