News Release

CME Group Announces Launch of Coal Contracts Settled Against Indexes Published by Argus and IHS McCloskey

Tue Aug 24 2010

LONDON/CHICAGO, August 24, 2010 – CME Group, the world’s leading and most diverse derivatives marketplace, today announced the launch of trading and clearing services for

four new swap futures and options on swap futures contracts.

These new contracts are settled against the API 2* and API 4* indexes published in the Argus/McCloskey’s Coal Price Index Report. Trading will be available on the New York trading floor and

CME ClearPort®

, a set of flexible clearing services open to over-the-counter (OTC) market participants to substantially mitigate counterparty risk and provide neutral settlement prices across asset classes. Trading and clearing are scheduled to begin on September 12 for trade date September 13. These contracts will be listed by NYMEX and subject to the rules and regulations of NYMEX and CME.

The indexes used for clearing and settlement are compilations of prices for steam coal, which is used for the production of electrical power, and are jointly calculated and published by Argus and IHS McCloskey, part of IHS (NYSE: IHS). The API 2 index is the international price benchmark for coal imported to northwestern Europe. The API 4 index is the international price benchmark for coal exported from the Richards Bay terminal in South Africa.

“Coal, which we have listed since 2003, continues to be an essential global commodity that our customers use to meet future energy needs,” said Joe Raia, CME Group Managing Director of Energy Products and Services. “Coal processors, producers, commercials and banks who lend money to international coal operations all have price exposure, but trading in international coal still represents less than 20 percent of the total coal consumed. Swap futures on these new coal contracts, which clear as regulated futures contracts, can be used as a means to hedge their activity related to these markets in an environment in which counterparty credit risk is mitigated.”

“The API 2 and API 4 price assessments are the key benchmarks for the international coal industry and are used heavily in spot, term and derivative contracts,” said Adrian Binks, chairman and chief executive of Argus Media. “As 95 percent of the world's traded coal derivatives are settled on the API 2 and API 4 indexes, it makes sense for CME Group to develop their new trading instruments around these key prices. We wish CME Group every success with their new contracts, which will add to the portfolio of risk management services available to coal market participants."

“We are delighted that the world’s oldest, and one of the most prominent, futures and options exchanges is to list coal contracts for trading and clearing that are settled against the API 2 and API 4 indexes,” said John Howland, Publisher, IHS McCloskey. “We are confident that this will enhance liquidity in all API 2 and API 4 related markets by bringing these risk management tools to new players. IHS McCloskey was one of the first to launch international coal indexes nearly two decades ago and today the vast majority of the world's internationally traded coal derivatives use the API 2 and API 4 indexes for price settlement.”

The four new financially settled listings beginning with the October 2010 contract month include:

• Coal (API 2) cif ARA (Argus/McCloskey) Swap Futures
• Coal (API 2) cif ARA (Argus/McCloskey) Option
• Coal (API 4) fob Richards Bay (Argus/McCloskey) Swap Futures
• Coal (API 4) fob Richards Bay (Argus/McCloskey) Option

The monthly futures contracts will be 1,000 metric tons in size, with a minimum price fluctuation of $0.05 (5 cents) per metric ton. CME Group customers who trade the recently launched Dry Freight contracts will be eligible for capital efficiencies by cross margining against the coal index contracts. For more information on the contracts, please go to

CME Group
As the world’s leading and most diverse derivatives marketplace, CME Group ( is where the world comes to manage risk. CME Group exchanges offer the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate. CME Group brings buyers and sellers together through its CME Globex® electronic trading platform and its trading facilities in New York and Chicago. CME Group also operates CME Clearing, one of the largest central counterparty clearing services in the world, which provides clearing and settlement services for exchange-traded contracts, as well as for over-the-counter derivatives transactions through CME ClearPort®. These products and services ensure that businesses everywhere can substantially mitigate counterparty credit risk in both listed and over-the-counter derivatives markets.

CME Group is a trademark of CME Group Inc. The Globe logo, CME, Chicago Mercantile Exchange, Globex and E-mini are trademarks of Chicago Mercantile Exchange Inc. CBOT and Chicago Board of Trade are trademarks of the Board of Trade of the City of Chicago. NYMEX, ClearPort and New York Mercantile Exchange are trademarks of New York Mercantile Exchange, Inc. COMEX is a trademark of Commodity Exchange, Inc. All other trademarks are the property of their respective owners. Further information about CME Group (NASDAQ: CME) and its products can be found at

All references to options refer to options on futures. The information within this brochure has been compiled by CME Group for general purposes only. CME Group assumes no responsibility for any errors or omissions. All matters pertaining to rules and specifications herein are made subject to and are superseded by official CME, NYMEX and CBOT rules. Current rules should be consulted in all cases concerning contract specifications.

Argus Media
Argus is a leading provider of price assessments, business intelligence and market data on the global crude and products, natural gas, coal, electricity, emissions and transportation industries. It is headquartered in London and has offices in Houston, Washington, New York, Portland, Calgary, Johannesburg, Dubai, Singapore, Tokyo, Beijing, Sydney, Moscow, Astana, Kiev, Santiago and other key centres of the energy industry. Argus was founded in 1970 and is a privately held UK-registered company. Learn more at

IHS McCloskey is part of IHS (
IHS (NYSE: IHS) is a leading source of information and insight in pivotal areas that shape today’s business landscape: energy, economics, geopolitical risk, sustainability and supply chain management. Businesses and governments around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS employs more than 4,200 people in more than 30 countries around the world.

*Trademark and copyright notice

API 2 and API 4 are trademarks of and are used under license from Argus Media Limited and IHS Global Limited. All copyrights and database rights in the API 2 and API 4 indexes belong exclusively to Argus Media Limited and IHS Global Limited and are used herein under license. Argus and IHS take no position on the purchase or sale of CME Group’s financially settled listings.

Argus, the Argus logo and Argus Media are trademarks of Argus Media Limited.

IHS, the IHS logo and McCloskey are trademarks of IHS Global Limited.

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