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    Japan ICIseminar02282012

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    lavaletteerica
    The Indonesian Coal Price Index (ICI) is a weekly price index for Indonesian steam coal that has been accepted since 2006 for pricing applications. ICI represents prices for 5 grades of Indonesian coal and is calculated as the average of the Argus index and Coalindo index. The Argus index reflects deals, bids and offers observed in the market while the Coalindo index reflects desired price views submitted by industry panels. ICI is used widely across the coal sector for trading, regulation, auditing and other applications.

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    Japan ICIseminar02282012

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    The Indonesian Coal Price Index (ICI) is a weekly price index for Indonesian steam coal that has been accepted since 2006 for pricing applications. ICI represents prices for 5 grades of Indonesian coal and is calculated as the average of the Argus index and Coalindo index. The Argus index reflects deals, bids and offers observed in the market while the Coalindo index reflects desired price views submitted by industry panels. ICI is used widely across the coal sector for trading, regulation, auditing and other applications.

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    The Indonesian Coal Price Index (ICI) is a weekly price index for Indonesian steam coal that has been accepted since 2006 for pricing applications. ICI represents prices for 5 grades of Indonesian coal and is calculated as the average of the Argus index and Coalindo index. The Argus index reflects deals, bids and offers observed in the market while the Coalindo index reflects desired price views submitted by industry panels. ICI is used widely across the coal sector for trading, regulation, auditing and other applications.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    56 views13 pages

    Japan ICIseminar02282012

    Uploaded by

    lavaletteerica
    The Indonesian Coal Price Index (ICI) is a weekly price index for Indonesian steam coal that has been accepted since 2006 for pricing applications. ICI represents prices for 5 grades of Indonesian coal and is calculated as the average of the Argus index and Coalindo index. The Argus index reflects deals, bids and offers observed in the market while the Coalindo index reflects desired price views submitted by industry panels. ICI is used widely across the coal sector for trading, regulation, auditing and other applications.

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    Understanding the ICI

    The Indonesian Coal Price Index

    Feisal Sham, Vice President, Sales and Marketing Asia Pacific Tokyo, 22 February 2012

    London, Houston, Washington, New York, Portland, Calgary, Santiago, Singapore, Beijing, Tokyo, Sydney, Dubai, Moscow, Astana, Kiev, Hamburg and Johannesburg

    Presentation Guide
    What is ICI How ICI is published Who use ICI and how they use it ICI and HBA(ICPR)

    What is ICI

    The most accepted Indonesian coal price index


    ICI is a weekly price index for Indonesian steam coal ICI has been accepted in many pricing applications since 2006 Indicating representative prices of 5 major commodity grades of Indonesian coal ICI is the driver for HBA (or known as ICPR)

    Independent Index
    ICI stands for

    Argus/Coalindo Indonesian coal price index


    A basket index of Argus index and Coalindo index The methodologies are different but both designed to pursue Independence Transparency Accuracy

    ICI evolves
    ICI now covers 5 different grades
    Calorific value ICI-1 ICI-2 ICI-3 ICI-4 ICI-5 6,500Kcal/kg GAR 5,800kcal/kg GAR 5,000kcal/kg GAR 4,200kcal/kg GAR 3,400kcal/kg GAR Sulphur 1.0% 0.8% 0.6% 0.4% 0.2% Ash 12% 10% 8% 6% 4% TM 12% 18% 30% 40% 50% Size Panamax Panamax Panamax Tug and Barge Mother vessel Timing in 90 days in 90 days in 90 days in 90 days in 90 days

    How ICI is published

    Argus and Coalindo


    ICI is a joint production between Argus and Coalindo Argus Media Limited
    World largest independent energy price reporting agency Dominant in coal price reporting with API, ICI and others Proven ability of research and analysis, based on 40 years of experience and worldwide cross markets networks

    PT Coalindo Energy
    Founded to facilitate the ICI partnership in 2006 Working closely with Indonesian government, regulators and ICMA Conduct weekly pannel-based assessment

    An ideal basket
    ICI is a basket index derived through the following formula

    ICI Argus index Coalindo index 2


    Argus index
    Assessment based on deals, bids and offers plus analysis Reflects observation of the market

    Coalindo index
    Panel-based calculation Reflects views of desired prices by players

    50:50 average

    ICI

    Argus observes the market


    Argus indices are assessments based on Market survey for deals, bids and offers
    Analysis with informed market intelligence Assessments are provided with explanation in Argus Coal Daily International

    Argus analysts discuss with around 30 players on a weekly basis A proven method that is also applied to API

    Argus Coal Daily International

    Coalindo reflects players' views


    Coalindo panels submit their views in the form of prices
    Number of coalindo's panels as of Feb 2012 ICI-1 ICI-2 ICI-3 ICI-4 ICI-5 6,500Kcal/kg GAR 5,800kcal/kg GAR 5,000kcal/kg GAR 4,200kcal/kg GAR 3,400kcal/kg GAR 25 panels 31 panels 32 panels 30 panels 21 panels

    Panels are selected to make balance of buyers, sellers and traders Top and bottom 10% outlier submissions are removed Submissions of 20pc higher or lower than last week are removed Consistent outliers are approached and replaced if necessary Selection of panels are reviewed every six month (Jan-Jun/Jul-Dec)

    ICI is delivered as numerical data


    ICI is a pure price data series, and delivered through web service or optional delivery tools such as GlobalView All 5 indices are updated every Friday

    Argus Web/Link

    GlobalView

    Who use ICI and how they use it

    ICI meets need for Indonesian coal index


    August 2006--- ICI was launched to address
    Growing impact of Indonesian coal internationally Critical requirement for Indonesian coal price index that is assessed directly, independently, and transparently Drew strong attention from government and ICMA, as well as from the marekt
    Steam coal net exports by key producing countries (mn t) 700 600 500 400 300 200 100 0 Source: IEA 87.8 2003 198.0 2008 231.4 2009 284.6 2010 Estimated South Africa Colombia Russia Australia Indonesia

    ICI is used across sectors


    Trading and analysis reference
    PLN Perseros buying price Domestic Market Obligation (DMO) to producers International trade to SE Asia, India and NE Asia, both on spot and term

    Regulation
    Annual production asset planning to Directorate of Mines and Minerals Driving component of monthly HBA (ICPR), tax and royalties

    Others
    Financial applications (project valuation and feasibility) Audit and internal reporting Basis for development of derivatives and OTC market Future exchanges interest for longer term pricing indicators

    ICI and HBA(ICPR)

    HBA(ICPR) is NOT ICI


    HBA(ICPR) is a royalty collecting tool NOT an index that show where the market is today There are as many HBAs as grades of coal HBAs are calculated monthly

    HBA stands for Harga Batubara Acuan

    What is HBA (ICPR)


    Devised and administered January 2009 by the Directorate General of Mineral and Coal, Ministry of Energy and Mineral Resources of Republic of Indonesia HBA(ICPR) is an average of
    ICI-1 Platts Indonesian quote Energy Publishings Newcastle Export Index Globalcoals Newcastle index

    HBA(ICPR) is a minimum price set to derive royalties


    CCOW royalty fee at 13.5% KP/IUP royalty fee at 3-7%

    ICI vs HBA

    ICI-1 vs HBA

    HBA analysis

    ICI summary

    ICI is a critical tool


    Growth of Indonesian Coal exports from 80 million tons in 2004 to 300 million tons in 2011
    Price flexibility Growing reliability Regional competition

    Pricing Indonesian coal as an autonomous source


    Transparency and reliability Projections and planning Investment strategy

    ICI designed to reflect these changes and has become a critical tool for coal companies to peg their pricing and intelligence needs

    Thank you
    Feisal Sham, Vice President, Sales and Marketing Asia Pacific Tel : +65 6496 9964 Mail : feisal.sham@argusmedia.com

    Please also contact our Tokyo office at Tel : 03-3561-1805 Mail : argusjapan@argusmedia.com

    Argus Media Limited


    Offices in London, Singapore, Beijing, Tokyo, Dubai, Moscow, Washington, Houston, Astana, Kiev, Calgary Founded in 1970 Today over 70 publications and more than 350 employees Privately held by employees and family of the founder Five times winner of UK Investor in People award for staff training

    Argus and coal


    Coal correspondents in: Australia, Singapore, Beijing, Tokyo, Moscow, London, South Africa, Washington DC and Colombia Largest coal team of any price reporting agency Publishers of:
    Argus/Coalindo Indonesian Coal Report Argus/McCloskey Coal Price Index Report (API 2,4,6) Argus Coal Daily International Argus Russian Coal Argus Coal Daily (US market)

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