Energy and metals information provider Platts, a division of The McGraw-Hill Companies, Inc., US, has introduced a valuation mechanism that will bring greater clarity and specificity to thermal coal pricing based on ash content. Ash is the non-combustible residue left after coal is burnt.
Platts now applies a ‘normalization’ value, expressed as a percentage of total price and in US dollars per metric ton, to each 1 percent of additional ash content in thermal coal within the published standard range of 17 percent to 23 percent. This makes apparent the premium and discounts that can arise within a single grade of coal, because coal, though like-kind in quality, can vary by individual chemical properties.
Prior to this innovation, the Platts assessment process considered ash content in the 17-23 percent range and normalised to a standard specification of 20 percent. The methodology change applies specifically to Platts' price assessment process for FOB Newcastle 5500 NAR 17-23 percent ash, an assessment for thermal coal loaded free on board (FOB) at Newcastle, Australia with an energy-producing calorific value 5500 kilocalories per kilogram and delivered seven- to 45 days forward on a net-as-received (NAR) basis.
Platts FOB Newcastle 5500 NAR 17-23 percent was first launched in January to address the industry's need for a global benchmark for lower calorific thermal coal produced and consumed in the Asia-Pacific region.
Platts publishes more than a dozen daily and weekly thermal coal assessments for Asia and other regions, serving the price information needs of thermal coal producers, power producers, cement manufacturers, coal traders and ship brokers. The Platts FOB Newcastle 5500 NAR and other coal assessments are published in Coal Trader International among other publications and services.
Platts' price assessment methodologies for coal have been developed in consultation with a cross section of key industry players and draw upon Platts' century of experience in benchmark price reporting in the energy markets. Assessments reflect transactions and bids and offers as determined between buyers and sellers in the open spot market.
