Intercontinental Makes Deal
To Establish Coal Contracts
A WSJ News Roundup
April 3, 2008; Page C14
IntercontinentalExchange Inc., the Atlanta operator of global derivatives exchanges and over-the-counter markets known as ICE, and globalCOAL, an electronic marketplace for thermal coal, agreed to develop and launch two new coal-futures contracts at ICE Futures Europe.
ICE Futures Europe plans to launch a financially settled futures contract based on the globalCOAL NEWC Index in this year's third quarter. The index is based on bids, offers and trades on the globalCOAL trading platform, with delivery in Newcastle, Australia. It is the leading reference point for over-the-counter trading in Asian coal markets, the exchanges said.
ICE and globalCOAL, which is operated by Global Coal Ltd., of London, also will work to develop a physically delivered coal-futures contract that it plans to launch later in the year, with delivery points in the Antwerp-Rotterdam-Amsterdam region, the main European hub for oil and coal trading.
The new contracts will be complementary to existing financially settled coal-futures contracts listed by ICE Futures Europe, the exchange said.
A competitor to ICE, Nymex Holdings Inc.'s New York Mercantile Exchange, a global energy-and-commodity-futures exchange, offers a coal-futures contract on domestic U.S. coal from central Appalachia.
"The development of futures is the next stage in the commoditization of the coal market," Eoghan Cunningham, globalCOAL's chief executive, said in a statement.
Like other commodities, coal prices have soared in the past year in response to rising demand, especially in growing areas such as China. About 40% of the electricity produced in the world comes from coal. Trading volume in futures and options contracts tied to commodities has soared, as well.
Regards,
frenchee
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