JFX officially launches coal contract

By Tri Subkhi R.

After more than a month of delay, the Jakarta Futures Exchange (JFX) finally launched on Tuesday the country?s first coal futures contract, with state-controlled PT Bukit Asam Tbk (PTBA) the only coal producer initiating the online-based trade.

During the initial create auction, PTBA offered 75,000 tons of coal, comprising of 60,000 tons (BA-70 HS coal) with calorific value of 7,000 kcal/kg (ADB) for September delivery from the Tarahan Port, in Lampung Province, and 15,000 tons (BA-63) with calorific value of 6,300 kcal/kg (ADB) for September delivery from Kertapati Port, in Palembang, South Sumatra Province.

"We expect a more transparent transaction between sellers and buyers. Online trading also limits the illegal transaction from illegal coal producers," PTBA President Director Milawarma said.

PTBA set the coal price in the range of $US76-79 per ton on the JFX with interval 50 cent. The transaction will automatically be closed once a buyer buys at ceiling price of $79 per ton.

Online bidding will be scheduled on August 21, 2014 and there are only 17 shortlisted bidders on JFX who are eligible to bid. The bidders are coal buyers from Taiwan, Japan, China, Dubai, Malaysia and from the domestic market.

Milawarma said that PTBA offered non-contracted coals on the JFX and expected to ramp up the transaction volume on JFX after the capacity of coal transport via railway has been expanded. PTBA plans to expand the capacity to 2.7 million tons per annum by 2017.

JFX said that it would also lure other coal miners in the country to conduct coal trade on the exchange with nearby targets including coal giants such as Adaro and Arutmin.

Editing by Reiner Simanjuntak