globalCOAL(R), the leading electronic marketplace for thermal coal, and IntercontinentalExchange (NYSE: ICE), a leading operator of global derivatives exchanges and OTC markets, today announced a cooperation agreement to develop and launch two new coal futures contracts at ICE Futures Europe(TM).
The contracts will consist of financially settled NEWC(R) coal futures, to be launched mid-2008, and physically settled ARA coal futures, to be launched later in the year.
"Expanding further into the coal market is a natural extension of our global energy complex," said David Peniket, president of ICE Futures Europe. "We believe that the development of traded futures contracts will help to build liquidity and transparency in the coal marketplace, and provide producers and consumers with new tools for managing their price risk."
"globalCOAL has a unique position in the coal market, with deep knowledge of the industry and its requirements, and a proven track-record in building the over-the-counter market. We are delighted to be working with them," Peniket said.
"The development of futures is the next stage in the commoditisation of the coal market and will provide tremendous opportunity for investors and pure financial players as well as physical coal market participants," said Eoghan Cunningham, globalCOAL chief executive officer. "Market feedback from traders across this spectrum strongly indicates that a futures contract settled against globalCOAL’s NEWC Index(R) will be successful in capturing liquidity."
ICE Futures Europe plans to launch financially-settled futures contracts based on the globalCOAL NEWC Index in the third quarter of 2008. The globalCOAL NEWC Index is based on bids, offers and trades on the globalCOAL trading platform with delivery in Newcastle, Australia, which is the leading reference point for over-the-counter trading in Asian coal markets. ICE and globalCOAL will also work with the market to develop a physically-delivered coal futures contract with delivery points in the Antwerp Rotterdam Amsterdam (ARA) region, which is the main European hub for oil and coal trading. The new contracts will be complementary to the existing financially-settled coal futures contract currently listed by ICE Futures Europe, API2 and API4, as published in Argus/McCloskey’s Coal Price Index Report.
