Argus Media and IHS McCloskey announced April 24 a major expansion of the API coal indexes in Asia-Pacific, with the addition of two API coal price indexes to the Argus/McCloskey’s Coal Price Index Report that 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 May 4.
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 90% the world’s internationally traded coal derivatives, the companies said.
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 Australian Newcastle export spec of 6,000 kcal/kg NAR. It is estimated that 50 million tonnes 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 already consumes about 3.8 billion tonnes of coal annually, but this is expected to double by 2020. China imported 182 million tonnes 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, called 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.