Europe Is Short On Gas Supply, Reference Coal Price As Of August Rises To 321.59 US Dollars Per Ton

Illustration. (Photo: Unsplash)

JAKARTA - The condition of European gas supply has a major influence in determining the increase in the Reference Coal Price (HBA) in August 2022 by 2.59 US dollars per tonne from the previous month. Thus, the August 2022 HBA will be USD 321.59 per tonne.

"The price of liquefied natural gas in Europe continues to climb following the uncertainty of gas supply. Some European countries have even reactivated coal-fired power plants in anticipation of an electricity crisis," said Head of the Communication, Public Information and Cooperation Bureau (KLIK) of the Ministry of Energy and Mineral Resources Agung. Personal in his official statement, Tuesday, August 2.

Another factor that also influences, continued Agung, is the surge in coal demand from China, India and South Korea. "This is because Russia offers a discount on coal prices," he said.

This increase recorded a positive trend in coal prices throughout 2022. In January 2022, the HBA was set at 158.50 US dollars per tonne, rising to 188.38 US dollars per tonne in February.

Furthermore, in March it touched the figure of 203.69 US dollars per ton, April was at 288.40 US dollars per ton, in May it was at the level of 275.64 US dollars per ton, and in June it was 323.91 US dollars per ton per ton.

"Last month (July) it had dropped to USD 319 per ton. In August 2022, the HBA rose to USD 321.59 per tonne," said Agung.

The 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 Sulfur 0.8 percent, and Ash 15 percent.

Agung added that the increase in the August HBA was also influenced by the increase in the average monthly index that composes the HBA, namely: NEX rose 3.75 percent, GCNC rose 3.32 percent, ICI fell 3.94 percent, and Platt's fell 3.58 percent.

For information, there are two derivative factors that affect the movement of the 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.

In addition, the government has also set domestic HBA specifically for electricity at 70 US dollars per tonne and 90 US dollars per ton for domestic HBA for industrial fuel needs.

"This maintains the competitiveness of the domestic industry and mainly ensures the affordability of industrial production for the community," concluded Agung.