New Products Committee Report
In May the Coal Trading Association's members have approved the development of two new over-the-counter (OTC) products, the result of a 20-month process to create new standards for domestic coal through the CTA’s New Products Committee. The new products include Illinois Basin barge and enhanced Western Sub-Bituminous Rail coal. Click here to read the news release about the new products.
New products will be discussed at the business meeting in New York on December 7 as part of the 2009 Coal Trading Conference.
NAPP Subcommittee
This subcommittee recommends the following new products.
| Origin Rail | MGA District |
| Contract Size Rail | Unit Train of approximately 12,000 tons |
| Potential Product #A | SO2 RAIL - 3.0 # SO2 typical; 3.4# max. |
| Potential Product #B | SO2 RAIL – 4.0# SO2 typical; 5.0# max |
| BTU | 13,000 BTUs/lb. with rejection below 12,800 Btu/lb. |
| Moisture | 85 typical |
| Ash | 8%typical |
| HGI | 55 typical |
| AFT | 2500 AFT Fluid, typical |
| Size 2 x 0 typical | |
| Price Adjustment | BTU - Price * ((Actual Btu/lb. -13000)/13000) |
In-progress Update: The NAPP Subcommittee is still working to reconfirm acceptable unit train size before launching product (either 120-car or 130-car units).
IL Basin Subcommittee
This subcommittee recommends the following new products.
| Origin | Fob barge on either side of the John T Myers lock (MP 846) between MP896 and MP784 on the Lower Ohio River ** |
| Contract Size | 1,000 tons per contract |
| Quality | |
| BTU/lb | 11,300 / <11,000 reject |
| Lbs SO2 | 6.0 max (no adj.) |
| Moisture | 16% max |
| Ash | 12% max |
| Vol | 30% min |
| Dry C1 | 0.25% max |
| HGI | 53 typical with 3 point tolerance below |
| AFT (H=W) | 2,050 F Min |
| Topsize | 3" max |
| Fines | max 55% passing 1/4" screen |
| Price Adjustment | BTU - Price * ((Actual Btu/lb. -11300)/11300) |
Other Products Subcommittee
Western Conclusions
After much discussion in the West, the Other Products Subcommittee determined the following course of action:
- Increase train size to 15,000 tons
- QVA (Over/Under) if train size falls outside 2% above/below 15,000 tons, adjusted monthly and on a per train basis.
- Jacobs Ranch mine inclusion as an 8800 source point for c’10 trades.
Eastern Conclusions
The Other Products Subcommittee continues to vet the following Eastern Issues:
- Over-Under Rule (“OUR”) in the East - Modifying to a train contract size of 11,000 tons and including OUR.
- Lowering rail BTU minimums for CAPP products.
- Expanding the NYMEX delivery area to include the Kanawha River
Next Steps
Subcommittees will reconvene to finalize plans and have all products ready for launch no later than March 31.
New Products Committee Members
Raphael Pierce, Chair
NAPP
Ron Chesnos (Chair)
Suresh Iyer
Craig Kelly
Kathy Gmelin
Sean Murphy
Ben Stothart
Tom Kuchera
IL Basin
Dan Vaughn (Co-Chair)
Aaron Martinsen (Co-Chair)
Judy Tanselle
Bryan Poettker
David James
Mike Moran
Kevin Larkin
Ryan Gentil
Jennifer Johnson
Other Products (Barge/Rail Basis, Over-Under Rule Re-evaluation, Rail Quality Basis, Western Product Revisions)
Tom Hiemstra (Co-Chair)
Rick Pieper (Co-Chair)
Jennifer Johnson
Brad Speer
Bob Bennett
Chris Duke
Larry LaCosta
Andy Cox
Matt Schwieder
Aaron Martinsen
Doug Young
Raphael Pierce
