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Pratim Ranjan Bose

Plan to launch the futures on Oct 1

Kolkata , Sept. 8

MetalJunction Services Ltd (MJSL) and NCDEX combine is planning to launch forward contracts on calorific value based indexed coal varieties in October.

The initiative is in line with the global practice whereby coal is priced as per its energy content.

"We have created a coal index and is planning to launch the futures on October 1," the MJSL Managing Director, Mr Viresh Oberoi, told Business Line.

The index will help create credible price benchmarks for domestic coal. MJSL had already created a vibrant spot market -

CoalJunction - for domestic coal, in collaboration with Coal India Ltd (CIL). However, the platform currently facilitates electronic-auction of coal based on its sourcing point.

Though he did not clarify whether the proposed futures would include imported coal and the number of varieties of domestic coal indexed, Mr Oberoi said MJSL has already created a spot market for imported thermal coal in collaboration with MMTC and Adani Group.

MJSL and NCDEX joined hands in May this year to work together to create a credible forward market for coal and petroleum products.

Paving way

According to sources, the creation of coal index will also pave way for launch of a over-the-counter (OTC) market for coal in the months to come.

It may be mentioned that the advent of CoalJunction is considered responsible for turning around the perennially sick Bharat Coking Coal Lt (BCCL) in 2005-06 after almost three decades by enabling better realisation for its produce.

Accordingly, CIL has already agreed to increase its exposure to Coaljunction from 20 million tonne in 2005-06 to 36 million tonne in 2006-07.

More Stories on : Commodity Exchanges | Coal

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Energy-content pricing model for coal mooted

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