Coal derivatives trading surges amid hedge fund influx

Increased activity by funds fuels take-off in listed and OTC volumes, traders say

Australian coal levels - robust
Coal volumes through late August already exceed 2015 totals

Trading activity in coal derivatives has surged this year as hedge funds have ploughed into the growing market, which in turn has provided liquidity for producers to safeguard their exposure to physical coal prices, market participants say.

"It is a circular event," says a senior coal trader at a German utility. "New market participants provided liquidity into the market, which has then attracted existing players seeing opportunities... Previously, [positions] were expensive to put on because

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