The indices, for premium and hard coking coal, will be published daily at 6.30pm Singapore time in $US per metric ton, FOB East Coast of Australia.

“This launch is a key milestone for TSI. It enables us to provide the complete suite of prices for key raw material inputs used in the production of steel,” TSI’s Singapore director Tim Hard said.

“The metallurgical coal supply chain is following in the footsteps of iron ore and currently evaluating the adoption of index-linked pricing arrangements.

Hard said miners, traders and buyers have been increasingly vocal in asking TSI to develop metallurgical coal indices.

“These indices are also likely to help unlock further appetite for steel price risk management tools, as their utilization grows in tandem with iron ore and scrap.

“A liquid forward market here would allow steel producers to hedge the majority of their raw material input costs,” he added.

The prices are compiled using spot transaction data submitted to TSI by buyers and sellers of Australia-origin product.

The prices on Friday were $US135mt and $US116.80mt for premium hard coking coal and hard coking coal respectively, TSI said.

“We have taken great care in developing these indices,” TSI analyst Jarek Mlodziejewski added.

“Determining the spot price for coking coal is a challenge but, after nearly two years of industry consultation and analysis, we are confident that we have developed the necessary proprietary analytical tools and industry expertise to normalize transaction prices for different qualities accurately.”

Subscribers to TSI’s Global service will receive the new daily coking coal indices as part of their service from Monday.