ASX still ambitious despite no coal futures trades

THE Australian Securities Exchange has had zero trades for its new futures and options contracts for free-on-board Newcastle thermal coal, but the bourse still expects to see a growing shift away from traditional annual supply agreements.
ASX still ambitious despite no coal futures trades ASX still ambitious despite no coal futures trades ASX still ambitious despite no coal futures trades ASX still ambitious despite no coal futures trades ASX still ambitious despite no coal futures trades

 

Blair Price

ASX general manager of emerging markets Anthony Collins told ILN the bourse had not yet had any trades, but this was not unusual for a new futures market.

However, he did say there were about eight or nine participants with approvals and talking about orders, but “it’s just that we haven’t seen anything cross at this point”

With a lot of thermal coal trading taking place in Europe, Collins said the ASX’s market for its new coal product lines was licenced and distributed in the United Kingdom and Europe, so he expected a lot of the trading to occur overnight through brokers in London.

He also expected thermal coal trading to become more popular, in comparison to fixed price annual contracts, which currently dominate transactions in the commodity.

“Once you start it, it won’t stop, we will see a lot more of it,” he said.

“Obviously it is happening with iron ore as well, but with coal it has started and we will see more of it, so there will be more need for the kind of product we offer going forward.

“The key difference between what we offer and any other exchange is that our clearing house stands between counter parties right through the delivery process so we are the first exchange to do that, to clear the physical.”

The earliest thermal coal futures on the ASX are October 2009, priced at $US71 a tonne.

A briefing pack on the new thermal coal futures and options is available on the ASX website.

The globalCOAL NEWC index is currently the standard for Newcastle spot thermal coal prices and is updated weekly every Monday on the globalCOAL website.