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China"s Demand is Increasingly Hot, Reference Coal Price Reaches USD150 per Ton
Publish date: 07 Oct 2021, Author : fpesbsi

The increasing demand for coal in China due to the increasing demand for coal for power plants that exceeds the domestic coal supply capacity, managed to boost the reference coal price (HBA) in September 2021 to USD150.03 per tonne. This figure rose USD19.04 per tonne compared to the HBA in August 2021 which reached USD130.99 per tonne.

"This is quite a phenomenal number in the last decade. China"s high demand exceeds its domestic production capacity and increasing coal demand from South Korea and the European region along with high natural gas prices catapulted HBA to USD150.03 per tonne," said the Head of the Bureau. Communication of Public Information Services and Cooperation of the Ministry of Energy and Mineral Resources, Agung Pribadi in Jakarta, Monday (6/9/2021).

According to Agung, these factors have pushed global coal prices to rise and record month-to-month records.


The price of reference coal was boosted by demand from China. Photo/SINDOnews

Had slid in February-April 2021, HBA recorded a consecutive increase in the period May-July 2021 to touch the figure of USD115.35 per ton in July 2021. The increase continued to be consistent until September 2021 by recording a new record high.

For information, HBA is the price obtained from the average of 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 6322 kcal/kg calories. GAR, Total Moisture 8%, Total Sulfur 0.8%, and Ash 15%.

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

Meanwhile, the demand derivative factor is influenced by declining electricity demand, which correlates with industrial conditions, import policies, and competition with other energy commodities, such as LNG, nuclear, and hydro.

Later, this September HBA will be used to determine the price of coal at the point of sale delivery on a Free on Board basis on a carrier vessel (FOB Vessel). (Source: Sindonews)