Indonesian Reference Coal Price for December Fell to $281.48 per Ton as Demand from India and China Declines

JAKARTADALY.ID – The Reference Coal Price (HBA) for December 2022 was set at USD 281.48 per ton or decreased by 8.67 percent or $26.72 per ton compared to the November 2022 HBA of USD 308.2 per ton.

This decrease was partly due to India's plan to reduce the capacity of the Steam Power Plant (PLTU). In addition, China's Zero Covid policy in controlling Covid-19 has had an impact on decreasing demand for coal due to reduced demand for electricity due to the completion of factory activities.

"India's plan to reduce PLTU capacity and reduced demand for Chinese coal due to the Zero Covid policy has resulted in a decrease in HBA this month," said the Head of the Bureau of Communication, Public Information Services and Cooperation (KLIK) of the Ministry of Energy and Mineral Resources, Agung Pribadi, in Jakarta, Thursday, December 1, 2022.

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The HBA movement since the beginning of 2022 touched its highest value in October, where the HBA climbed to the level of $ 330.97 per ton.

Europe's geopolitical conditions are the result of the Russia-Ukraine conflict which has caused fluctuations in European gas prices to become the main lifting factor. China's coal production, which has increased but its economy is exercising, is another factor that has lowered the HBA this month.

There are two derived factors that affect the movement of HBA, namely, supply and demand. In terms of supply derivatives which are influenced by the season (weather), mining techniques, supplier country policies, to technical supply chains such as trains, barges, and loading terminals.

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As for the demand-derived factor, it is influenced by the decreased demand for electricity, which is correlated with industrial conditions, import policies, and competition with other energy commodities, such as LNG, nuclear, and hydro.

HBA itself is a price obtained from the average of the Indonesia Coal Index (ICI), Newcastle Export Index (NEX), Global coal Newcastle Index (GCNC), and Platt's 5900 in the previous month, with quality equivalent to calories 6322 kcal/kg GAR, 8% Total Moisture, 0.8% Total Sulfur, and 15% Ash.

Later, this price will be used directly in buying and selling coal commodities (spot) for one month at the point of sale on a Free on Board basis on the carrier ship (FOB Vessel).

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