Contract specifications

Thermal Coal Futures Contracts (FOB Newcastle)
Contract Unit 1,000 tonnes of Thermal Coal quoted and settled on the basis of a calorific value of 6,000 kcal/g NCV and an ash and sulphur content of <13AR and <0.60 AR, respectively
Contract Months Monthly contracts sufficient to support 4 full calendar quarters ahead
Commodity Code CX
Minimum Price Movement Prices are quoted in cents per tonne.
The minimum fluctuation of US$0.05 is equal to US$50.00
Last Trading Day 1st Business Day of the month preceding the Contract Month.
Trading Hours 5.14pm - 7.00am and 8.34am - 4.30pm AEST (during US daylight saving time)
5.14pm - 7.30am and 8.34am - 4.30pm AEST (during US non daylight saving time)
Settlement Method Deliverable Contracts
Delivery Period Delivery shall occur FOB on any day in the Contract Month as determined by the Buyer.
Deliverable Tolerances • Calorific Value: Minimum 5,650 NCV
• Total Moisture: Maximum 15.0% (as received basis)
• Volatile Matter: Minimum 27.0% and maximum 35.0% (as received basis)
• Ash: Maximum 17.0% (as received basis)
• Sulphur: Maximum 1.0% (as received basis)
• Selenium: Maximum 2 ppm (dry basis)
• Boron: 60 ppm (dry basis)
• Calcium Oxide in Ash: Maximum 7% (dry basis)
• Hardgrove Grindability Index: 45 (min) - 70 (max)
• Nominal Topsize: 50mm
• Sizing: Fines <2mm not to be more than 30%
• Ash Fusion Temperature (Reducing): 1250 degrees C (min) Initial Deformation
Final Settlement Value

The Final Settlement Value will reflect the formula and adjustments for Net Calorific Value, Ash, Sulphur, Demurrage and Despatch. 

NCV Adjustment
The Final Settlement Price shall be adjusted using the following formula and the Binding Results NCV:
(NCV/6000)*(Final Settlement Price)

Ash and Sulphur Adjustments
The Interim Settlement Price shall also be adjusted by the following percentage discounts for Ash and Sulphur:

Ash <=13% <=14% <=15% <=16% <=17 >17
% Discount none 1% 2% 3% 4% Outside Deliverable Range

Sulphur <=0.6 <=0.7 <=0.8 <=0.9 <=1.00 >1.00
% Discount none 0.5% 1.0% 1.5% 2.0% Outside Deliverable Range

 Demurrage and Dispatch Rates
• Demurrage Rates: US$1.00 per tonne per day.
• Dispatch Rates: US$0.50 per tonne per day.

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Options on Thermal Coal Futures
Contract Unit One Thermal Coal futures contract for a specified contract month.
Contract Months Put and Call options available on futures contracts up to six contract months ahead.
Commodity Code CX
Minimum Price Movement Prices are quoted in cents per tonne.
The minimum fluctuation of US$0.01 is equal to US$10.00.
Exercise Prices US$2.50. New option exercise prices created automatically as the underlying futures contract price moves.
Contract Expiry At 4.30pm AEST on the Last Trading Day for the underlying futures contract.
Trading Hours 5.14pm - 7.00am and 8.34am - 4.30pm AEST (during US daylight saving time)
5.14pm - 7.30am and 8.34am - 4.30pm AEST (during US non daylight saving time)
Settlement Method Options may be exercised on any business day up to and including the day of expiry. In-the-money options are not automatically exercised at expiry. Buyers may exercise in, at and out-of-the-money option positions held, by lodging a notice of exercise. On receipt of the exercise request, the options will be exercised against a random selection of seller positions, and the resultant futures legs automatically recorded in the Buyer and Seller’s account.

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Quarterly Thermal Coal Strip Futures Products
Contract Unit Three Thermal Coal futures contracts comprising a calendar quarter
Contract Months 4 Quarterly strip futures products
Commodity Code CY
Minimum Price Movement Prices are quoted in cents per tonne
The minimum fluctuation of US$0.01 is equal to US$30.00
Last Trading Day The Final Trading Day of the first contract month in the relevant Quarterly Strip Futures Product.
Trading Hours 5.14pm - 7.00am and 8.34am - 4.30pm AEST  (during US daylight saving time)
5.14pm - 7.30am and 8.34am - 4.30pm AEST (during US non daylight saving time)
Settlement Method n/a

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Quarterly Options over Thermal Coal Futures Contracts
Contract Unit One Quarterly Strip of Thermal Coal Futures
Contract Months Put and Call options available on three quarterly strips.
Commodity Code CY
Minimum Price Movement Prices are quoted in cents per tonne.
The minimum fluctuation of US$0.01 is equal to US$30.00.
Exercise Prices US$2.50. New option exercise prices created automatically as the underlying futures contract price moves.
Contract Expiry Contracts expire at 4.30pm AEST on the day 6 weeks prior to the day immediately preceding the commencement of the calendar quarter for the underlying Strip Futures product. If this day is not a trading day for the contract then the following trading day will be the expiry day. ASX will publish expiry dates in advance of new contracts being listed.
Trading Hours 5.14pm - 7.00am and 8.34am - 4.30pm AEST  (during US daylight saving time)
5.14pm - 7.30am and 8.34am - 4.30pm AEST  (during US non daylight saving time)
Settlement Method Options may be exercised on any business day up to and including the day of expiry. In-the-money options are not automatically exercised at expiry. Buyers may exercise in, at and out-of-the-money option positions held, by lodging a notice of exercise. On receipt of the exercise request, the options will be exercised against a random selection of seller positions, and the resultant futures legs automatically recorded in the Buyer and Seller’s account.

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 Yearly Thermal Coal Futures Contracts
Contract Unit  Twelve Monthly Thermal Coal Futures Contracts
Contract Months 4 calendar years ahead
Commodity Code CZ
Minimum Price Movement Prices are quoted in cents per tonne.
The minimum fluctuation of US$0.01 is equal to US$120.00.
Last Trading Day 6 weeks prior to the day immediately preceeding the commencement of the calendar year. If this day is not a trading day for the contract then the following trading day will be the Last Trading Day. ASX will publish expiry dates in advance of new contracts being listed.
Trading Hours 5.14pm - 7.00am and 8.34am - 4.30pm (during US daylight saving time)
5.14pm - 7.30am and 8.34am - 4.30pm (during US non daylight saving time)
Settlement Method n/a

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Options over Yearly Thermal Coal Futures Contracts
Contract Unit One Calendar Year Thermal Coal futures contract.
Contract Months Put and Call options available on four calendar years ahead.
Commodity Code CZ
Minimum Price Movement Prices are quoted in cents per tonne.
The minimum fluctuation of US$0.01 is equal to US$120.00.
Exercise Prices US$2.50. New option exercise prices created automatically as the underlying futures contract price moves.
Contract Expiry Contracts expire at 4.30pm AEST on the day 6 weeks prior to the day immediately preceding the commencement of the calendar year for the underlying Yearly Thermal Coal Futures product. If this day is not a trading day for the contract then the following trading day will be the expiry day. ASX will publish expiry dates in advance of new contracts being listed.
Trading Hours 5.14pm - 7.00am and 8.34am - 4.30pm (during US daylight saving time)
5.14pm - 7.30am and 8.34am - 4.30pm (during US non daylight saving time)
Settlement Method Options may be exercised on any business day up to and including the day of expiry. In-the-money options are not automatically exercised at expiry. Buyers may exercise in, at and out-of-the-money option positions held, by lodging a notice of exercise. On receipt of the exercise request, the options will be exercised against a random selection of seller positions, and the resultant futures legs automatically recorded in the Buyer and Seller’s account.

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Alternate Delivery Mechanism

A Seller or Buyer may agree with the Buyer or Seller with which it has been matched to make and take delivery under terms or conditions which differ from the terms and conditions prescribed by ASX. In such a case, Clearing Participants shall execute an Alternative Notice of Intention to Deliver on the form prescribed by ASX and shall deliver a completed executed copy of such Notice to ASX.

The delivery of an executed Alternative Notice of Intention to Deliver to ASX shall release the Clearing Participants and ASX from their respective obligations under ASX contracts.

Upon receipt of an executed Alternative Notice of Intention to Deliver, ASX will return to the Clearing Participants all margin monies held for the account of each with respect to the contracts involved.

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Delivery via the Exchange for Physical (EFP) Mechanism

The listing of a coal (FOB Newcastle) futures contract would enable the development of an EFP market for coal delivered FOB or even CIF at other ports. 

To complement the introduction of ASX’s thermal coal (FOB Newcastle) futures contract, the Australian Financial Markets Association (AFMA) are introducing a complimentary ISDA based swap agreement.  This ISDA based swap agreement will:

  • provide a useful cash settlement alternative to delivery; and
  • encourage greater participation, and in turn price discovery, in the determination of the Final Settlement Price.

There will be no restrictions on brokers providing screen based brokerage services using the ISDA based swap agreement. 

Rather than addressing location and potential quality differentials between different ports within the futures contract specification, an EFP market is the most efficient way of dealing with these delivery requirements.

Appropriately licensed brokers can provide voice or screen-based broking services for EFP transactions, provided they comply with ASX rules concerning these transactions.

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