Leading international price reporting organisations Argus Media and IHS McCloskey today announce a major expansion of the API coal indexes in Asia-Pacific.
They will add two API coal price indexes to the Argus/McCloskey's Coal Price Index Report that will cover high-ash coal exports from Australia and deliveries to south China. The companies will also launch a new joint API coking coal index. The new indexes will be launched on 4 May 2012.
The expansion of the API indexes will address demand from market participants for reliable independent benchmarks to use as price references in physical and derivative contracts. Argus and IHS McCloskey already publish three API indexes, which are used for 90pc of the world's internationally traded coal derivatives.
API 5 represents 5,500 kcal/kg NAR (net as received), high-ash coal shipped from Australia, a new market that has emerged over the last few years. This is a lower quality than reflected in the current API 6 fob Newcastle index, which is based on the traditional Newcastle export specification of 6,000 kcal/kg NAR. It is estimated that 50mn t of this lower quality coal was exported from Newcastle last year.
API 8 reflects 5,500 kcal/kg NAR coal delivered to south China*. China consumes about 3.8bn t/yr of coal, but this is expected to double by 2020. China imported 182mn t last year and its increasing reliance on imported seaborne coal in the southern coastal regions has a major influence on prices in the internationally traded seaborne markets. Argus and IHS McCloskey intend to launch an API 9 index for 6,000 kcal/kg NAR coal delivered to south China later in 2012.
Argus and IHS McCloskey are also launching a new API index for fob Australia coking coal, API C1. This index assesses the price of prime hard coking coal exported from a range of east coast Australian ports. This will be published weekly through a new service, the Argus/IHS McCloskey Coking Coal Price Index Report.
All the Argus and IHS McCloskey indexes are calculated by averaging the relevant Argus and IHS McCloskey price assessments. The methodologies used to derive these prices are available online at www.argusmedia.com/methodology and www.mccloskeycoal.com.
Argus chairman and chief executive Adrian Binks said: It is clear that the coal markets in Asia-Pacific are developing rapidly and we are pleased to be able to expand our indexation services in this region to meet the demand for new benchmarks. It makes sense for us to add to the suite of API indexes as these are already used by the vast majority of companies involved in coal markets.
IHS publisher John Howland said: The Asia-Pacific coal market has developed at an astonishing rate in the last few years - not only in terms of volume, but also in terms of the diversity of benchmark qualities referenced by the market. This suite of new API indexes addresses the need for these qualities to be indexed.
* The IHS McCloskey assessment used in the API 8 is the IHS McCloskey/Xinhua Infolink South China (5,500kc NAR) marker. This is produced in association with Xinhua Infolink, a leading privately-owned, independent Chinese intelligence and insight provider.
Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.
Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reached a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.Read the Terms of Service