The Price Of Coal Acuan December Fell To 281.48 US Dollars Per Ton, This Is The Cause

The price of Coal Acuan December fell to 281.48 US Dollars per Ton, This is the cause

JAKARTA - The Ministry of Energy and Mineral Resources (ESDM) set the Reference Coal Price (HBA) in December 2022 of US$281.48 per ton or decreased by 8.67 percent or 26.72 US dollars per ton compared to HBA November 2022 of 308.2 US dollars per ton.

This decline was partly due to India's plan to reduce the capacity of Steam Power Plants (PLTU). In addition, China's policy in controlling COVID-19, namely Zero COVID, has an impact on reducing coal demand due to decreased electricity demand due to restrictions on factory activities.

"India's plan to reduce PLTU capacity and decrease China's coal demand due to its Zero COVID policy led to a decline in HBA this month," said Head of the Communications, Public Information and Cooperation Service (KLIK) of the Ministry of Energy and Mineral Resources Agung Pribadi in an official statement, Friday, December 2.

The movement of HBA since the beginning of 2022 touched its highest value in October, where HBA rose to touch the level of 330.97 US dollars per ton.

The geopolitical conditions in Europe were the result of the Russia-Ukraine conflict which caused fluctuations in European gas prices to become the main driver factor.

China's coal production is increasing, but its economic slowdown is another factor in the decline in HBA this month.

There are two derivative factors that affect the movement of HBA, namely, supply and demand.

The supply derivative factor is influenced by season (weather), mining techniques, supplier state policies, to technicalally supplied chains such as trains, barges, and loading terminals.

Meanwhile, demand derivative factors are 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 calories, Total Moisture 8 percent, Total Sulphur 0.8 percent and Ash 15 percent.

Later, this price will be used directly in the sale and purchase of coal commodities (spots) for one month at the free on board sales handover on board the carrier (FOB Vessel).