By Angela Macdonald-Smith
Nov. 7 (Bloomberg) -- GlobalCOAL, an on-screen trading system for power-station coal, and ICE Futures Europe set Dec. 5 as the start date for coal futures based on exports from Newcastle, Australia, the biggest export harbor for the fuel.
The futures contract will complement ICE's existing Rotterdam and Richards Bay contracts, globalCOAL and ICE said in an e-mailed statement. Price swings and the credit crisis have boosted demand for a futures contract cleared through an exchange and a ``strong start'' is expected, Eoghan Cunningham, globalCOAL chief executive officer, said in the statement.
The financial market for coal trading has reached 2.2 billion metric tons, almost four times the size of the physically traded market, globalCOAL's Singapore-based chief operating officer Patrick Markey said yesterday in Sydney. The globalCOAL Newcastle futures contract will compete against a similar contract to be introduced by ASX Ltd. in Sydney between February and May next year.
``In light of the rising popularity of ICE Futures Europe's coal contracts in recent months, reaching a record 34 million tons traded in October, we see a bright future for exchange- listed coal derivatives,'' David Peniket, president of ICE Futures Europe, said in the Nov. 6 statement.
GlobalCOAL is owned by Global Coal Ltd., whose shareholders include BHP Billiton Ltd. and Rio Tinto Group, the world's biggest and third-biggest mining companies, and coal buyers E.ON AG and Japan's Electric Power Development Co. ICE Futures Europe, Europe's largest energy market, is owned by Intercontinental Exchange Inc.
To contact the reporter on this story: Angela Macdonald-Smith in Sydney at amacdonaldsm@bloomberg.net
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