Argus/IHS McCloskey’s API 8 to be listed by SGX for clearing in Asia
London, 27 March 2013
Energy and commodity publisher Argus and business information provider IHS have licensed the API 8 coal index to Singapore Exchange (SGX) for the listing of derivative products. This will assist the development of risk management products for the regional and global coal markets.
SGX will introduce the clearing of API 8 swaps settled against the Argus/IHS McCloskey index for coal used in power generation, delivered to south China.
A swaps market is beginning to emerge in Asia-Pacific for thermal coal services as physical trade expands, fuelled by demand growth in China, India and South Korea. Recent price volatility, triggered by the oversupply of physical coal, has encouraged producers and consumers to consider linkage to published indexes to mitigate price risk. The first swaps to settle against API 8 were traded in August.
The API 2 and API 4 indexes produced by Argus and IHS McCloskey are used as the industry standard settlement price for the active physical and swaps market covering European coal imports and exports from South Africa, respectively.
Argus Media chairman and chief executive Adrian Binks said: “We welcome SGX’s decision to launch these new coal swap clearing facilities, which will help facilitate the growth of risk management services in Asia.”
IHS publisher John Howland said: “With Chinese and Asian demand booming, the south China price is now the most keenly watched metric in the global coal market. The new tools that SGX plans to introduce will help serve the needs of the companies operating in this region.”
SGX Head of Derivatives Michael Syn said: “The new API 8 coal swap is a welcome addition to our AsiaClear offering and demonstrates our commitment to continuously meet customers’ risk management needs in Asia.”
The API coal indexes are calculated by averaging the relevant Argus and IHS price assessments. The methodologies used to derive these prices are available online at www.argusmedia.com/methodology and www.mccloskeycoal.com.
The IHS McCloskey assessment used in the API 8 index is the IHS McCloskey/Xinhua Infolink South China (5,500kc NAR) marker. This is produced in association with Xinhua Infolink, a leading privately owned, independent Chinese intelligence and insight provider.
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About Argus Media
Argus is an independent media organisation with nearly 500 full-time staff. It is headquartered in London and has offices in each of the world’s principal energy centres. Its main activities comprise publishing market reports containing price assessments, market commentary and news, and business intelligence reports that analyse market and industry trends.
More than half of Argus’ staff are commodity journalists who specialise in reporting news and price information relating to physical energy and related commodity markets.
They operate according to a rigorous Editorial Code of Conduct and an Ethics Policy that align with best journalistic practice, including the avoidance of conflicts of interest. Argus is a leading provider of data on prices and fundamentals, news, analysis, consultancy services and conferences for the global crude, oil products, natural gas, electricity, coal, emissions, bioenergy, fertilizer, petrochemical and transportation industries. Data provided by Argus are widely used for indexation of physical trade. Companies, governments and international agencies also use Argus information for analysis and planning purposes.
Argus has 19 offices globally, including London, Houston, Washington, New York, Calgary, Rio de Janeiro, Singapore, Dubai, Beijing, Tokyo, Sydney, Moscow, Astana and other key centres of the energy industry. Argus was founded in 1970 and is a privately held UK-registered company.
About IHS (www.ihs.com)
IHS (NYSE: IHS) is the leading source of information and insight in critical areas that shape today’s business landscape. Businesses and governments in more than 165 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS is committed to long-term, sustainable growth and employs more than 6,000 people in 31 countries around the world.