Marex Spectron facilitates API5 index-linked thermal coal term deal for 2014August 20, 2013
Marex Spectron in Singapore has completed the arrangement of a term deal for Australian 5500NAR high ash thermal coal, intended for delivery throughout 2014. The transaction was concluded between an Australian producer and an Asian utility.
The deal was executed with price reference to Argus / McCloskey’s API5 Index. The API5 Index has been credited for providing market participants with a more precise reflection of the market for mid-CV high ash thermal coal in the Asia Pacific region. Index linked pricing serves as a risk mitigating measure, and complements a market structure which is moving increasingly towards spot transactions.
“This transaction is further testament to the growing confidence in, and use of, API5 as the effective price benchmark for Australian producers, Asian end users and global traders of mid-CV Australian thermal coal,” says Matthew Thomas, Global Head of Physical Coal at Marex Spectron based in Singapore.
Launched in May 2012 by price assessment providers Argus and McCloskey, the API5 contract tracks free-on-board (FOB) prices of high ash coal from Newcastle, Australia. The basis is 5,500 net calorific value, a quality of coal commonly traded into China, Korea, India and Taiwan for electricity generation and wider industrial use. Together with API8, the corresponding contract for delivery into China, the API5 is receiving increased attention among traders for benchmarking, floating price arrangements and risk management through cleared derivatives.
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Notes to editors:
Marex Spectron is one of the world’s largest privately held brokers of financial instruments in the commodities sector and a leader in facilitating trade in physical energy products.
We are the conduit for clients transacting in raw materials and related derivatives. We do so efficiently, discretely and with confidence, on or off-exchange.
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We also broker financial futures and options, foreign exchange, fixed income and equity securities.
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Our clients are predominantly commodity producers and consumers, banks, hedge funds, asset managers, brokers, commodity trading advisors and professional traders.
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We are over 600 market professionals, headquartered in London with offices across Europe, North America and Asia.