Argus and IHS have announced the expansion of the API coal indexes in Asia Pacific.
The new API 12 coal price index will assess multi-origin, mid-quality coal imported to east India from South Africa, Indonesia, Australia and other exporters.
API 12 reflects 5500 kcal/kg NAR (net as received) coal delivered to east India. Coal accounts for around 80% of India's power generation, with demand growing by more than 10% per annum. Thermal coal demand is also growing from cement makers and sponge iron producers as India embarks on massive infrastructure projects. Imports are expected to account for 21% of overall Indian coal demand of 770 million t in the 2013/14 fiscal year, according to the Reserve Bank of India.
Indonesia supplied as much as 76% of India's coal imports in the past three years while South Africa accounted for 19%. Indonesian FOB price references already exist for the 5500 kcal/kg NAR grade, as well as API 3 for those of South African origin and API 5 for Australian origin.
Argus Media CEO, Adrian Binks, commented: "We are pleased to be able to meet demand from market participants for an additional reliable, independent benchmark. This is the latest in the API thermal coal index series, which 90pc of the world's internationally traded coal derivatives settle against."
"This is an exciting addition to the API benchmarks and underlines the markets changing focus towards 5500 kcal/kg NAR products, particularly in Asia-Pacific. From Australia to China and Richards Bay to India, API benchmarks can be used to track and trade this increasingly vibrant market for 5500 kcal/kg NAR thermal coals," added IHS Energy senior director, John Howland.
Adapted from press release by Katie Woodward
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