ICI4 Indonesian coal export derivatives contract growing
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Trading activity picking up during month 2 for Indonesian thermal coal derivatives.
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ICI4 Indonesian coal export derivatives contract growing
- 1. Trading momentum builds on Indonesian Thermal Coal derivatives Market Reporting Consulting Events Coal illuminating the markets The CME Group’s new Indonesian export GAR 4,200 kcal/kg coal derivatives contract (based on the ICI 4™ index ) was launched successfully on 5 February, with a trade on the first day. The ICI contract picked up a further two trades in its first month to a totalof30,000, before the Lunar holidayinevitably slowed trade. Trading in March has picked up briskly, matching the February full-monthtotalinthefirstfivetradingdays.Bycloseoftrading on 9 March volumes were already at 50,000t. “This has potential”, said Evolution Markets managing director Thomas Hiemstra. “We see increased interest in ICI 4. Asthe developmentofthe productcontinues, we expectmore companies signing up and trading.” CME’s senior director of energy products Nicolas Dupuis said “we’re getting lots of inbound questions about ICI 4, as this new contract provides market participants in the region with an effective risk management tool. Indonesia is the world’s largest thermal coal exporter, after all. We have completed more onboarding this week, as interest in this new contract continues to grow.” The ICI 4 index is a key regional benchmark for thermal coal exports, with the majority of physical market index linkage being tied to it. The listing by CME Group’s Nymex exchange, has given coal producers, trading firms and buyers in the region the opportunity to manage price risk more effectively. The ICI 4 index applies to 4,200 kcal/kg GAR thermal coal shipped from Indonesia (Kalimantan), and is the reference price for low-heat value coal traded in the Asia-Pacific market. But it may have uses beyond this calorific grade, with notable correlations to 5,000 GAR and 5,800 GAR fob Indonesia, and market participants saying they would consider using it as a proxy for 3,800 and 3,400 GAR coals. Singapore | 13 March 2018 ICI4 trading picks up speed in March 4,200 GAR Correlations to higher calorie grades sustained Contact us for more information: Singapore@argusmedia +64 6496 9898 Scan the QR code here http://www.linkedin.com/groups/Argus-Asia-Coal-4678737/about