gC NEWC to API-5 Differential

Always interesting to track the gC NEWC (6,000kcal) pricing compared to API-5. It is harder to find pricing information on API-5 and TER sell some blended arrangement of either discount to gC NEWC or premium to API-5. The report from NHC has a nice reference graph that I use.

Shows the differential at record highs US$200/t premium or a 100% premium on the API-5 to gC NEWC. Coal quality at the moment is king. I personally had thought with the European energy crisis that this differential may be closing...

By comparing the TER and WHC quarterlies, TER recieved A$403/t sold from BA, compared to WHC achieving A$528/t (US$370/t). So WHC are receiving a premium of 31% to TER BA sales, or conversely TER are achieving a discount of approximately 24% to gC NEWC pricing (which WHC receives).....

It is clear that TER are selling at a substantial premium to API-5 (40% premium), and at a not unreasonable 24% discount to gC NEWC. I have seen some research papers reference only a 15% discount to NEWC for BA sales, which is clearly not correct in the rear view mirror. It will be interesting to see if this discount does reduces, as it has a huge impact on margins achieved.... A pricing comparison like WHC do would be beneficial, honest and transparent for TER shareholders.

gC NEWC for the Sept quarter will average around US$410-420/t, and through to December looks promising. On the basis of a continued 24% discount to NEWC the TER average realised coal price could still have a dramatic leg up, the 24% discount would mean US$311/t or A$445/t - so a significant A$42/t of margin improvement potentially on the table for the Sept and Dec quarters...

cG NEWC to API-5 Comparison (from NHC report)


TER average coal price (June Qtly)

WHC average coal price (June Qtly)


gC NEWC Futures