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Monday, 20 August 12
CHINESE COAL SWAPS RISE, INDONESIAN COAL CONTRACTS SOFT


COALspot.com - Sub-Bit Indonesia coal swaps (FOB ) for October 2012 delivery lost -2.05 percent W-o-W on Friday (17 August 2012) closing but gained 0.031 percent on D-o-D, according to the data released by AsiaClear OTC coal swaps on 17th August 2012.

Sub-Bit FOB Indonesia coal swaps for October delivery opened on Monday (13 August  2012) at US$ 64.7 pmt and closed on Friday (17 August 2012) at $ 63.37 lost around $ 0.80 pmt. However The Q1 and Cal 13 deliveries also lost  $ 0.96 and $ 0.85 respectively. The Indonesian coal swaps performed flat to weak last week.

Cal 2013 deliveries for  Sub-Bit Indonesia coal was opened at $ 70.10 pmt on 13 August 2012 and closed $ 69.25 on 17th August 2012.

CFR South China coal shipments to China for October delivery moved positively compare to last week. On 13 August CFR South China coal shipments to China  was opened at $ 82.93 and closed on 17 August at $ 83.22 gained $ 0.29 pmt. The swap gained 0.14 percent D-o-D and 0.34 percent W-o-W on Friday.


 


Sub-Bit FOB Indonesia coal contracts for October 2012 delivery closed at US$ 63.37 on Friday ( 17 August 2012) compared to US$ 64.70 Monday opening, lost US$ 1.33 per MT. In the meantime, CFR South China coal October delivery gained US$ 0.29 pmt W-o-W on Friday (17 August) closed at US$ 83.22 against US$ 82.93 Monday Opening.

CFR South China coal, Q4 delivery lost 0.01 percent W-o-W 0.46 percent D-o-D. Sub-Bit FOB Indonesia coal contracts for Q4 delivery gained 1.74 percent or US$ 1.12 pmt W-o-W but lost 0.74percent D-o-D and closed at US$ 65.26.

CFR South China delivery (Q1 2013) has closed US$ at $ 85.68 on 17 August compared to US$ 85.40 opening on Monday (13 August 2012).

A commodity swap is a financial agreement whereby a floating, or spot, price is exchanged for a fixed rate over a specified contract period.

Sub-Bit FOB Indonesia coal contracts and CFR South China coal for Cal 2013 deliveries closed at $ 69.25 pmt $ 88.62 pmt respectively on Friday. Cal 2013 delivery prices for Sub-Bit FOB Indonesia coal and CFR South China coal are $ 5.88 and $ 5.40 higher compared to October deliveries.


September onwards, coal prices are expected to move forward as India is expected to back to market after monsoon holidays. Chinese economic improvements also is expected to  drive coal prices from the current level. Indonesian coal prices are trying to take a U turn last week, but failed to conclude the deals at a better prices than previous week.

Coal consumption for the power generation in Asia stood at an estimated 2.7 billion metric tons in 2011. From 2012 to 2020, that figure is expected to rise to 4.4 billion tons annually, according to GBI as stated by Climate wire  / Scientific American.

GBI projects that India, currently the world's third-largest coal producer, will also see a surge in production on the order of 6.8 percent annually  because of the country's heavy reliance on coal-fired electricity along with expanding steel, cement and fertilizer manufacturing sectors.

By 2020, India is projected to produce 1.1 billion tons of coal annually, up from 632 million tons in 2011. Such robust growth would place India on par with the United States in terms of total production, assuming international markets for U.S. coal remain strong, according to Climate wire  / Scientific American.

International as well as Indian media reports says that, Kentucky, the third-largest coal-producing state last year, has reached an agreement to export 9 million tons of coal annually to India for the next 25 years in a $7 billion deal.

According to president of the Kentucky Coal Association, as quoted by courier-journal,  “we currently only export about 5 percent of our Kentucky coal overseas, we expect that number to grow”. “Today's announcement is good news, not only for Kentucky coal miners, but everyone who will benefit from this important natural resource.”

Changing dynamics in the current world thermal coal industry,  US is trying to increase the coal exports to overseas specifically targeting for Asia market, while Indonesia the current largest coal exporter is trying to reduce coal exports considering its own future consumption.



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