The launch of coking coal futures at Dalian Commodity Exchange in Northeast China has been delayed, possibly until late August, due to slow approval procedures, said sources close to the matter Wednesday.
A spokeswoman of DCE was not immediately available for comment.
The coking coal contracts will be on monthly basis, and settled through physical delivery of coking coal cargoes to designated warehouses, according to the latest draft.
Quality is to be based on the Chinese classification system which uses parameters such as the G-value and Y-value, but could also include coke strength after reaction (CSR) as a parameter. The DCE coking coal specs require CSR to be no less than 50%. But no premiums or penalties will be imposed if the CSR value is higher or lower.
The coking coal to be traded should be hard coking coal with volatile matter on a dry, ash-free basis between 16% and 28% ash content (on an air-dried basis) above 10% and no more than 11.5% total sulfur (on a dry basis) above 1.1% and below 1.4%, G-value at no less than 75 for warehouse entry test and above 65 as an outbound acceptance level. Maintenance margin will be 5%.
Trading volume would be 30 mt per lot, much lower than the 100 mt per lot for the coke futures listed last year.
DCE listed its coke futures on April 15, 2011, at an opening price of Yuan 2,180/mt ($344.50/mt) for the most liquid contract. The January 2013 contract, the most widely traded one, closed at Yuan 1,567/mt on Tuesday. Trading volume was 115,768 lots representing 11.6 million mt on bilateral basis.
The starting price for the coking coal contract will be decided a week before the launch date