Course description
This intensive and interactive course focuses on how the international coal markets are developing. The course identifies the price risks involved and the use of OTC and exchange traded instruments in managing these risks. You will explore both the physical and paper markets and review the different trading procedures available and the profiles of different participants in the market.
Suitability - Who should attend?
- Anyone who is affected by the changes in the international price of coal
- Energy industry personnel working in supply, trading, risk management, refining, finance, transport, exploration and production
- Coal trading and distribution companies
- Energy-related government departments and regulators
- Purchasing, planning, and finance departments in major energy consumers
- Energy publications
- Bankers, accountants, auditors and others associated with energy companies and energy financing
Training Course Content
Day 1:
SESSION I
- Introduction and the physical coal market
- Coal varieties and qualities
- Main steam coal producers, importers and exporters
- Steam coal physical flows and evolution
SESSION II
- The steam coal derivatives market
- Main products traded: history, trading volumes
- Definition and methodology of main indices and futures
- Market structure: principals, brokers, exchanges
- New products recently launched
SESSION Ill
- Coal derivatives trading examples
- Practical usage of derivatives for suppliers, end users, traders
- Hedging and arbitrage
- Trading strategies - Group Based Activity
Day 2:
SESSION I
- Clearing and the coal market
- The credit crisis and the benefits of clearing for the coal market
- Cleared coal volume trends
- The clearing process and its participants: exchange, clearing house, clearing members
- How does an ICE cleared transaction differ from an OTC trade?
- Cash flow illustration
- Potential pitfalls to avoid
SESSION II
- Forward curve and price forecast
- Difference between forward curve and price forecast
- The different shapes of forward curve: contango vs backwardation
- Historical coal forward curves and links with the physical market
- Trading the forward curve: Group Based Activity
SESSION III
- Introduction to financial options in the coal market
- Status of the option market: historical volumes, types of options
- Example of call and put options
- Live demonstration of the Black Scholes model
- Application to the physical market
SESSION IV
- Introduction to other commodities directly relevant to coal trading
- The physical dry freight market: vessel size, and pricing
- Main dry commodity flows: iron ore, coking coal, grains
- The financial freight market: indices and market structure (principals, brokers, exchanges).
- Emissions certificates, dark-spreads and spark-spread
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ICE Education
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EC1Y 4SA London
Intercontinental Exchange - Open Courses in Commodities and Financial Markets
Intercontinental Exchange's diverse markets span futures and options on interest rates, commodities, indexes and FX, as well as equities and equity options. These markets are relied upon by international market participants, along with our post-trade infrastructure. ICE is uniquely positioned...
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