Background and Mission
The Coal Trading Association was established in 1999 to promote coal trading capability and liquidity in the US. CTA develops and maintains industry standards for coal trading activity with the goal of achieving a disciplined, liquid and efficient coal trading industry.
CTA pursues its mission through the following objectives:
- Promote the advancement and application of policy programs, practices and regulations relevant to market-based coal trading.
- Encourage and facilitate appropriate information exchange among members and other interested professional and technical groups.
- Provide programs in education and training to improve knowledge, skills and practice tools of members.
The association meets in New York every December to host the Coal Trading Conference, a two-day event that includes a business meeting, which attracts representatives from almost every major coal producer and many individuals from the investment, utility and trading community. At a half-day mid-year meeting, held at different locations every spring, CTA members discuss pending significant issues and elect new board members.
In 2000 CTA completed work on a Master Agreement to facilitate the use of consistent terms and condi-tions for the purchase, sale and trading of coal and coal options in the over-the-counter market (OTC).
The CTA Standards Committee worked closely with the NYMEX to develop clearing of OTC physical barge transactions and new financially settled swaps contracts for barge and rail products, which were introduced on November 1, 2004. To facilitate trading of financially settled swaps, the CTA drove the establishment of the OTC Broker Indices with Platts, Argus and Coal and Energy Report.
In 2004 the board began developing a long-term plan for managing the association. As a first step, the board hired a professional association manager to operate CTA’s headquarters, handle the day-to-day administrative activities and support strategic planning
More recently the CTA has formed a committee to update the Master Agreement with particular focus on the credit section of the agreement, which has become out-dated in this more credit conscious post-Enron environment. Additionally, the CTA has addressed the shipping and nondelivery problems that the industry has faced over the past year by forming a new committee to recommend how OTC participants could best handle those issues. The Non-performance committee will work with the Master Agreement commit-tee to develop new language that more adequately addresses non-delivery issues.
FOR BACKGROUND CONTACT: BOB MCLEAN