About this Training Course
Indonesia plays a major role in the global thermal coal market and is an important supplier to power and industrial consumers across Asia. Understanding the Indonesian coal sector therefore requires an understanding of its position within the wider international physical coal market, including competing supply origins, international trade flows, coal quality, freight and global pricing benchmarks.
Physical coal trading is also closely connected to financial markets. Producers, traders and consumers use international coal benchmarks and financial instruments to manage price exposure. However, Indonesian physical coal does not always correspond directly with the specifications, locations and pricing structures of internationally traded financial benchmarks. This creates important relationships between physical price exposure, financial hedging and basis risk.
This three-day programme provides participants with a practical understanding of Indonesia’s role in global physical and financial coal markets. It progresses from global physical coal trading and cargo economics to financial markets and hedging, before bringing the two together through an introduction to coal portfolio management.
By the end of the course, participants will be able to:
- Understand Indonesia’s position in the global thermal coal market, including key supply origins, importing markets and international trade flows.
- Explain how Indonesian physical coal is traded, including coal quality, pricing, logistics, freight, Incoterms and delivered cargo economics.
- Understand major international coal pricing benchmarks and how they relate to Indonesian physical coal transactions.
- Recognise the role of financial coal markets and instruments, including forwards, swaps, futures and options.
- Apply basic hedging principles to manage physical coal price exposure and understand basis, freight and residual risks.
- Evaluate physical and financial positions together within a coal trading portfolio, including exposure, hedge ratios and key P&L drivers.
- Make more informed commercial decisions by considering price, quality, freight, timing, market exposure and portfolio risk together.
This course is ideal for professionals involved in:
- Coal and commodity trading
- Commercial, marketing and business development
- Coal procurement and fuel sourcing
- Market analysis and risk management
- Shipping, freight and logistics
- Power utilities and industrial coal purchasing
- Coal producers and mining commercial teams
- Finance and trading support functions
It is also suitable for professionals who are new to coal markets and want a practical understanding of physical trading, financial markets and hedging.
- Basic
- Intermediate
The course uses a practical learning approach combining instructor-led explanations, worked examples, group discussions, hands-on exercises and case studies. Participants progressively apply concepts across physical coal trading, financial markets, hedging and portfolio management, with emphasis on real commercial decision-making rather than advanced quantitative techniques.
Unlock the potential of your workforce with customized in-house training programs designed specifically for the energy sector. Our tailored, in-house courses not only enhance employee skills and engagement but also offer significant cost savings by eliminating travel expenses. Invest in your team’s success and achieve specific outcomes aligned with your organization’s goals through our expert training solutions. Request for further information regarding our on-site or in-house training opportunities.
In our ongoing commitment to sustainability and environmental responsibility, we will no longer providing hard copy training materials. Instead, all training content and resources will be delivered in digital format. Inspired by the oil and energy industry’s best practices, we are leveraging on digital technologies to reduce waste, lower our carbon emissions, ensuring our training content is always up-to-date and accessible. Click here to learn more.
Indonesia plays a major role in the global seaborne thermal coal market. In particular, it supplies coal to China, India, and Southeast Asian markets. As a result, changes in Indonesian supply can affect regional trade flows and international coal markets.
Physical coal trading involves buying, selling, transporting, and delivering actual coal cargoes. Therefore, traders must consider coal quality, freight, pricing, delivery terms, and logistics.
Financial coal trading focuses on managing price exposure. For example, market participants can use forwards, swaps, futures, and options to manage coal price risk.
Coal quality strongly affects commercial value. For example, traders assess calorific value, moisture, ash, sulphur, and GAR or NAR specifications.
Freight also affects the final delivered cost. Therefore, buyers compare the coal price with transportation costs and destination economics before making commercial decisions.
Coal companies use hedging to reduce their exposure to price movements. In practice, they can match physical positions with financial instruments linked to coal benchmarks.
However, hedging cannot remove every type of risk. Companies must still manage basis risk, freight exposure, liquidity, and hedge ratios.
Basis risk occurs when physical coal prices and financial benchmark prices move differently. For instance, differences in quality, location, timing, and freight can create this mismatch.
Therefore, traders may cross-hedge Indonesian coal against international benchmarks. Even so, some price exposure can remain after the hedge.
Coal traders monitor supply, demand, prices, freight, coal quality, delivery periods, and market benchmarks. In addition, they track physical and financial positions together.
Portfolio managers assess net exposure, hedge ratios, basis risk, freight risk, and P&L. As market conditions change, they may adjust physical positions or financial hedges to manage overall portfolio exposure.