Marex Spectron Group, the global commodities and financial markets brokerage, has become the first broker to offer coverage of the Chinese coal swaps market.

This is a key development in the evolution of the coal market in China, which is the world’s biggest producer and consumer of coal − accounting for 48% of both global production and consumption in 2010.

CFR China 5500 grade swaps are now tradable via Marex Spectron’s live trading screen or over the phone through its voice brokering team. The swaps are settled against IHS McCloskey/Xinhua Infolink South China CFR markers. Prices across the quarters, seasons, calendar half years, and full years have already been discussed.

“Interest in the Chinese swaps has been driven largely by players based in Asia, where we have established the market-leading position since opening an office in Singapore in April,” says Nick Lygoe, co-head of Coal at Marex Spectron. “However we are also expecting traders from Europe and the US to get involved too, much as they have done in the Indonesian coal swaps market.”

Volumes in the Indonesian sub-bituminous coal swaps market have surged since Marex Spectron started covering the market in April.