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How it works
Trading on globalCOAL
What will I see when I log in to the globalCOAL screen?
You will see real-time, firm bids and offers for standardised parcels of coal posted by globalCOAL Market Members. The most liquid physical markets are for thermal coal traded FOB at Richards Bay and Newcastle, and delivered DES at Amsterdam-Rotterdam-Antwerp and for metallurgical coal delivered FOB Australia.
When a trade is executed, a pop-up box instantly informs you which contract has traded and at what price. The globalCOAL trading screen is an unparalleled source of coal pricing information.
Where can I download the globalCOAL software?
The application which runs globalCOAL's trading platform is only available for Market Members to download. An individual from a Market Member company who has been granted trading or view-only rights to the platform can access the download link by logging in to the website and visiting the Administration / IT and Software section.
Alternatively, IT personnel or other support staff who require access can email FOsupport@globalcoal.com to request the download link.
Can I trade straight away?
You will first need to establish bilateral credit agreements with other globalCOAL Market Members. To trade thermal coal, you must approve a minimum of six counterparties; and for met coal you must approve a minimum of four.
Counterparty credit is managed through our sophisticated, yet user-friendly online counterparty matrix tool.
When your chosen counterparties reciprocate, you can post bids and offers and execute trades on the platform. Don't forget – until then you can still view prices and trades.
What is the quality of the coal? And the delivery terms?
All trades on the platform are underlied by SCoTA v8, globalCOAL's standard contract and a benchmark reference in the world of coal trading. In conjunction with an RSS (Relevant Standard Specification) specific to the product traded, SCoTA defines the quality and delivery terms and conditions so you can focus on negotiating what matters most: price and volume.
What products can I trade on screen?
You can buy and sell a comprehensive range of physical and financial coal contracts for the world's most liquid thermal and metallurgical coal markets. Find a full list here.
If buying branded met coal, when will I know what brand is being supplied?
The Seller must communicate which of the qualifying brands will be supplied no later than 20 days prior to the start of the Delivery Period.
Which terms do I decide on screen, and which are pre-agreed in SCoTA?
Delivery terms and conditions, quality specifications and post-delivery price adjustments are all pre-defined in SCoTA and the RSS. For a given delivery period, only price and volume need to be negotiated on screen.
When can I see the name of the counterparties I trade with?
Bids and offers are completely anonymous on the trading screen. At the point of execution, the parties to a trade will be informed of the identity of their counterparty. The wider market will only be notified of the terms of the transaction (price, volume, delivery period) – but not who was involved.
How do I know that I won't be matched with someone I can't trade with?
You are in control of who you can trade with. The system will only allow you to execute a price on the platform if you have already approved that counterparty on the globalCOAL system. The prices posted by approved counterparties appear in red on the trading screen, and are tradable. The prices posted by other counterparties appear in pink, and are not tradable.
How can I limit my credit exposure using EFP?
Following the credit crunch of 2008, globalCOAL partnered with the market to develop the Exchange of Futures for Physical (EFP). This is a credit-efficient way to transact physical coal on a fixed price basis.
Under the terms of an EFP, once a fixed price deal is agreed on screen, the transaction is broken into two parts:
- An index-linked physical deal and
- An OTC or cleared financial transaction for an equivalent volume of coal
Post transaction, your globalCOAL broker will help you negotiate the levels of each part with your counterparty, so that the fixed price is achieved.
By using an EFP, counterparties achieve the following:
- A fixed price deal: If the Futures position is retained to expiry, it will settle against the Index thereby ensuring the fixed price negotiated is achieved
- Price risk mitigation: If either party defaults on the physical trade, the other has covered any price risk through their Futures position, so can replace the cargo with minimal loss
- Credit risk mitigation: With a cleared Futures position, the Clearing House becomes a counterparty to both Buyer and Seller. If either party defaults on the physical trade, the Clearing House will still perform. In this way, parties limit their overall credit exposure
- Pricing flexibility: Either party may exit their Futures position at any time before expiry, to once again float the price of their physical position
When does a transaction take place?
A transaction is deemed to take place at the time of execution on the platform (either by yourself or upon instructing globalCOAL to transact on your behalf), at which point you are contractually bound under the terms of SCoTA and the RSS.
How much can I buy?
Thermal coal: The minimum quantity is 25kt, with a +/-10% shipping tolerance.
Metallurgical coal: The minimum quantity is 35kt with a +/-10% tolerance. The majority of transactions are traded in panamax (75kt) or capesize (150kt) quantities.
Can I see it in action?
Is the final price adjusted for quality?
Yes. The invoice price is based on final quality at the Delivery Point, as per normal market practice.
The Relevant Standard Specifications (RSSs) contain strict rejection limits for most elements of the specifications. In addition, some RSSs provide for price adjustments, in situations in which the coal that you have bought or sold has been mixed with other coal and so cannot be rejected, on the basis of four parameters – Total Moisture, Ash, Volatile Matter, Total Sulphur and, in the case of met coal, Calculated CSR.
How can I be assured of the quality of the coal I will receive?
Strict rejection limits and price adjustments laid out in the Relevant Standard Specifications give buyers comfort on loaded quality. SCoTA contains clear contractual provisions for umpire analysis and rejection procedures.
How is the CSR calculated?
Predicted CSR will be calculated using a formula developed by ALS Global and globalCOAL. This formula has been developed from empirical coking data derived under standard testing conditions and regressed against corresponding coal specifications.
Who is globalCOAL?
globalCOAL hosts the world's most comprehensive online platform for the sale and purchase of seaborne thermal and metallurgical coal. It is also the architect of SCoTA, a standard coal trading agreement which has become the coal market's contract of choice.
Our shareholders number amongst them some of the world's leading coal market participants.
globalCOAL is authorised and regulated by the Financial Conduct Authority in the UK and the National Futures Authority in the USA.
What is the platform?
globalCOAL's online trading platform serves as an electronic marketplace where participants bid, offer and transact cargos of physical coal.
Over 170 companies worldwide are members of globalCOAL. They include major coal producers, utilities, international trading houses and steel plants in all parts of the world. See the list of globalCOAL Market Members
How can I join?
To view prices or transact cargos on the globalCOAL platform, companies must become Market Members. See how to join and the costs.
How is the globalCOAL platform regulated?
globalCOAL is authorised and regulated by the Financial Conduct Authority in the UK, and adheres to a set of very strict rules dictating conduct on the trading platform.
globalCOAL also complies with the IOSCO Principles for Financial Benchmarks.
Have questions? Contact our sales team
T: +65 6311 4570