Overview

The API 5® index represents the spot price of mid-CV Australian steam coal exported to growth markets, such as China and Vietnam. It references a lower-heat product than the API 2® and API 4® indexes and is used in physical and over-the-counter contracts. The API 5® index is calculated as an average of the Argus and McCloskey's price assessments for fob Newcastle 5,500 kcal/kg NAR coal. The API 5® price index is available in the Argus/McCloskey’s Coal Price Index Report.

Price assessment details

What is API 5® coal price index?

In Asia, the API 5 index (fob Newcastle 5,500 kcal/kg) is a key physical coal benchmark. It represents the spot price of mid-CV Australian steam coal exported to growth markets, such as China and Vietnam. This index is highly liquid and is widely used in physical and financial coal transactions. The lower-heat 5,500 kcal/kg coal specification is a common thermal coal type and is replacing 6,000 kcal/kg product for some thermal power generators in Asia-Pacific.

How is this assessment used?

Chinese end-users now use the API 5 index in their medium-term contracts, which is a major change from previous years, when all Australian procurement was on a short-term, fixed-price basis.

Large international trading houses are interested in a futures contract which settles against the API 5 index now that the index is being used further downstream by Chinese end-users, especially as they can no longer hedge price risk using ZCE contracts.

Increasingly, Vietnamese buyers are using the API 5 index in supply contracts when they purchase mid-CV Australian coal. Vietnamese coal imports continue to increase.

Large volumes of Australian steam coal exports are linked to the API 5 index.

What is the API price series?

The API indexes represent the price of liquid, physical coal benchmarks at key geographical pricing hubs, such as cif ARA (API 2® index), and fob Richards Bay (API 4® index), according to the API specifications. These specifications standardise the assessment around key criteria relating to contract basis, location, and energy value.

The API indexes provide transparency and visibility in the coal spot market and are widely used across the globe as a pricing basis for physical purchases and sales. The API series includes the API 2, API 3, API 4, API 5, API 6, API 8, API 10 and API 12  indexes. These indexes are published in the Argus/McCloskey’s Coal Price Index Report on a weekly basis on the last London working day of the week, usually a Friday.

Key price assessments

Argus’ coal price benchmarks are recognised by the market as trusted and reliable indicators of the real market value. Explore some of our most widely used and relevant price assessments.