A new coal agreement
The ISDA Coal Annex allows market participants to combine physical coal trades and coal derivatives under a single trading agreement. Lauren Teigland-Hunt says this development should improve liquidity in the global coal market
More than ever before, market participants are seeking to standardise and commoditise the trading of coal. Much of the desire for standardisation stems from the increased volatility in electricity prices brought about by deregulation of the electricity sector. This volatility has led to greater demand for short-term physical coal purchase and sale transactions as well as coal derivatives, as many market participants have realised that unhedged, longer-term physical contracts might expose them to
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