API 8 coal swaps hits monthly high in November

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Dec 06, 2013, 12:00 ET

SINGAPORE, Dec. 6, 2013 /PRNewswire/ -- Global energy and commodity news and price reporting agency Argus reports that thermal coal swaps volumes traded against the API 8 index have reached 10mn t since its launch last year, with November recording the highest monthly volume of 2mn t.

API 8 assesses 5,500 kcal/kg NAR coal delivered to south China. The country consumed nearly 4bn t of coal last year, with imports at 290mn t and up by about 20pc from the previous year. China's increasing reliance on imported seaborne coal in its southern coastal provinces has a major influence on prices in international markets.

A swaps market is beginning to emerge in Asia-Pacific for thermal coal as physical trade expands, fuelled by demand growth in China, India and South Korea. Recent price volatility, triggered by the oversupply of physical coal, has encouraged producers and consumers to consider a linkage to published indexes to mitigate their price risk. The first swaps to settle against API 8 were traded in June 2012, with the swaps now cleared on global exchanges.

Argus Media chairman and chief executive Adrian Binks said: "We are pleased to see the index has been accepted by the Asian market as a risk management tool and serves the needs of the companies operating in this region."

The API coal indexes are calculated by averaging the relevant Argus and IHS price assessments. The IHS McCloskey assessment used in the API 8 index is produced in association with Xinhua Infolink. The methodologies used to derive these prices are available online at www.argusmedia.com/methodology and www.mccloskeycoal.com

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About Argus Media

Argus is an independent media organisation with almost 600 full time staff. It is headquartered in London and has offices in each of the world's principal commodity centres. Its main activities comprise publishing market reports containing price assessments, market commentary and news, and business intelligence reports that analyse market and industry trends.

More than half of Argus employees are commodity journalists who specialise in reporting news and price information relating to physical energy and related commodity markets. They operate according to a rigorous Editorial Code of Conduct and a compliance and ethics policy that align with best journalistic practice, including the avoidance of conflicts of interest.

Argus is a leading provider of data on prices and fundamentals, news, analysis, consultancy services and conferences for the global crude, oil products, natural gas, electricity, coal, emissions, bioenergy, fertilizer, petrochemical, metals and transportation industries. Data provided by Argus are widely used for indexation of physical trade. Companies, governments and international agencies use Argus information for analysis and planning purposes.

Argus has 19 offices globally, including London, Houston, Washington, New York, Calgary, Rio de Janeiro, Singapore, Dubai, Beijing, Tokyo, Sydney, Moscow, Astana and other key centres of commodity industries. Argus was founded in 1970 and is a privately held UK-registered company.