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Coal Markets and Risk Management

Course Information

Price£1,950.00 + VAT
Duration2 days
LocationLondon
Available Dates

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

Booking Information

Tel: +44 (0) 20 7065 7706

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