Increase In China's Coal Production Pushes HBA To 319.22 US Dollars Per Ton

JAKARTA - The Reference Coal Price (HBA) in September 2022 fell slightly compared to the August HBA.

September HBA was observed to fall 0.74 percent or 2.37 US dollars to 319.22 US dollars per ton.

The decline in HBA in September was influenced by the decline in the average value of the monthly index that composes HBA, namely ICI decreased 4.95 percent, Platts fell 4.54 percent, GNCC rose 1.60 percent and NEX rose 1.39 percent.

"In addition, the increase in China's coal production in their efforts to overcome the electricity crisis caused by the heat wave and drought that hit its hydroelectric power plant (PLTA) also contributed to the decline in world coal prices," said the Head of the Communication Bureau, Public Information Service. and Cooperation (KLIK) of the Ministry of Energy and Mineral Resources Agung Pribadi in a written statement, Thursday 1 September.

Another factor that also influences, continued Agung, is China's efforts to continue to increase coal imports from Russia and Australia.

"This is one of the causes of the NEX and GCNC indexes, the trend is still rising," he explained.

The movement of the HBA since the beginning of 2022 touched the highest value in June, where the HBA rose to touch the figure of 323.91 US dollars per ton.

The geopolitical conditions in Europe caused by the Russia-Ukraine conflict and the electricity crisis in India due to the heat wave were the main factors.

After that, HBA tends to fluctuate, increasing and decreasing.

The July HBA was at 319.00 US dollars per ton, and last August it was 321.59 US dollars per ton.

For information, 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, and technical supply chains 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.

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