SUBSCRIBER NOTE: Platts proposes new US thermal coal netbacks

S&P Global Platts is proposing to revise the methodology for the thermal coal netback for FOB US East Coast and plans to launch two new netbacks reflecting the value for thermal coal FOB US Gulf Coast and FOB Vancouver.

For the FOB US East Coast netback (Platts symbol COUSC00), Platts intends to change the heat content from 6,500 NAR kcal/kg to 12,500 Btu/lb GAR to reflect available US domestic thermal coals for export better. In addition, Platts will make the heat conversion from the delivered price minus freight. The heat conversion is currently made from the delivered price.

FOB US Gulf Coast (basis 11,500 Btu/lb GAR, 5 lb SO2/MMBtu) will show the price of thermal coal compared with CIF ARA coal (basis 6,000 kcal/kg NAR, 1% sulfur) minus the Panamax freight rate from Mobile, Alabama to Rotterdam, adjusted for heat and sulfur and converted to $/st.

The sulfur adjustment will be based on a new daily assessment that will be published alongside the FOB US Gulf Coast netback. The sulfur assessment will reflect the value of one tenth of one percent of sulfur per short ton for thermal coal destined for Northern Europe.

FOB Vancouver (basis 8,800 Btu/lb GAR, 0.8 lb SO2/MMBtu) will show the price of thermal coal compared with CIF Japan coal (basis 6,000 kcal/kg NAR, 1% sulfur) minus the Panamax freight rate from Roberts Bank, British Columbia to Japan, adjusted for heat and converted to $/st.

The netbacks will publish daily in Coal Trader and Coal Trader International, and are scheduled to launch October 3.

Please address any questions or comments by September 2 to coal@platts.com and pricegroup@platts.com.

For written comments, please provide a clear indication if comments are not intended for publication by Platts for public viewing. Platts will consider all comments received and will make comments not marked as confidential available upon request.