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Indonesian lower quality coal swaps gain

Steel News - Published on Fri, 03 Aug 2012

Bloomberg reported that swap contracts rose for lower quality thermal coal loading in the fourth quarter from Indonesia.

Ginga Petroleum Singapore said that the contract for sub-bituminous coal with a calorific value of 4,900 kilocalories a kilogram for loading from Indonesia in the fourth quarter climbed 20 cents to USD 63.95 per tonne on a net as received basis. The swap for delivery in September fell 35 cents to USD 61.15 on a net as received basis.

The swap for coal with a heating value of 5,500 kilocalories a kilogram for shipment to South China in the fourth quarter was unchanged at USD 82.75 per tonne on a net as received basis. The September contract remained at USD 81.35 on a net as received basis.

According to Standard Chartered Plc, China’s imports of power-station coal may slow amid higher than average stockpiles at utilities, increased hydroelectric production and stagnating electricity demand.

Ms Serene Lim an analyst at Standard Chartered in Singapore said said that China’s demand for thermal coal is weaker than last year. Inventories at major utilities were equivalent to 26 days of consumption as of July 10th 2012 compared with the typical 18 days during the summer peak-consumption period.

A commodity swap is a financial agreement whereby a floating price is exchanged for a fixed rate over a specified contract period. About 60% of Indonesia’s coal is classified as sub bituminous. Higher moisture levels and a lower carbon content reduce the heating value compared with grades with a better quality stock. Sub-bit coal has kilocalories of less than 6,100 per kilogram.

Source - Bloomberg

Posted By : admin on Fri, 03 Aug 2012
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