Swaps contracts gained for lower- quality thermal coal from Indonesia, the world’s biggest exporter of the fuel, according to Ginga Petroleum Singapore Pte Ltd., an energy broker. China prices also rose.
The June 2012 contract for Indonesian sub-bituminous coal with a heating value of 4,900 kilocalories a kilogram rose 5 cents to $74.70 a metric ton on a net as-received basis yesterday, according to data from the energy broker. Swaps for the third quarter of 2012 increased 65 cents to $74.90 a ton.
Swaps contracts for China coal gained. Coal with a heating value of 5,500 kilocalories a kilogram on a net as-received basis for shipments to South China for June was 25 cents higher at $98.35, Ginga said. The swap for the third quarter also rose 25 cents to $98.50 a ton.
There is an oversupply of coal for power stations in Asia, driving prices lower as Chinese demand slows and U.S. exports rise, according to Sanford C. Bernstein & Co.
China may consume about 200 million tons of thermal coal less than last year as power production growth has dropped to 6 percent this year after increasing 14 percent last year, said Michael Parker, a Hong Kong-based analyst at Sanford C. Bernstein, in a report e-mailed today.
A commodity swap is a financial agreement whereby a floating, or spot price, is exchanged for a fixed rate over a specified contract period.
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