Insight
The evolution of seaborne coal pricing
*Please note that this report only includes an Excel data file if this is indicated in "What's included" below
Report summary
Price is the most sensitive factor in the coal trade. Over the past half-century, the factors influencing coal prices have exploded with the increase in trading volumes, the growing number of participants, and the closely interconnected global economy. As a result, the global coal pricing system has undergone significant developments, gradually evolving from fixed annual pricing to a coexistence of various models. This insight provides a detailed overview of the evolution of the global coal pricing system, the main price indices and their applicable markets, as well as the role of financial derivatives in coal trade. Please read for more information.
Table of contents
- Executive summary
- Pricing mechanisms
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Metallurgical coal – pricing mechanisms
- Reference Price (RP) settled between BHP and Japanese Steel Mills (JSM) widely in the metallurgical coal industry (1960s – 2004)
- Annual benchmark system for metallurgical coal (2005 – 2009)
- Shift to the quarterly benchmark system (2010 – 2017)
- Emerging quarterly and index pricing – Metallurgical Coal (2017 – Now)
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Thermal coal – pricing mechanisms
- Champion Negotiators system for Japanese buyers and Australian sellers (1987 – 2001)
- Annual benchmark system – Thermal Coal (2002 – 2010)
- China and India enter the seaborne thermal coal market
- Emerging quarterly and index pricing – Thermal Coal (2010 – Now)
- Mainstream coal price benchmarks in global coal market
- Benchmark purchasers for coal
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Financial instruments in coal pricing
- Speculative buying for physical delivery to the futures market
- China's coking coal market becoming more financialised
- China’s thermal coal market less financialised since 2022
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Key markets and drivers including seaborne coal pricing
- China as the clearing market for seaborne coking coal, followed by India’s emerging role in the spot market
- European and Chinese demand leading the thermal coal market
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The future of coal pricing
- What will drive the evolution of metallurgical coal pricing in the future?
- What will drive the evolution of thermal coal pricing in the future?
Tables and charts
This report includes 7 images and tables including:
- Contract and spot prices for PLV HCC FOB Australia (1990 – 2024)
- Contract and spot prices for Australian thermal coal (1990 – 2024)
- Mainstream metallurgical coal price benchmarks
- Mainstream thermal coal price benchmarks
- Countries that influence benchmark metallurgical coal prices
- Countries that influence benchmark thermal coal prices
- Coal miners moving to quarterly settlement with Steel mills
What's included
This report contains:
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