Indonesia has lowered coal benchmark price for November to USD 97.90/MT, nearly 3% drop from USD 100.89/MT from October, the country’s Energy and Mineral Resources Ministry said in a statement posted on its website.
It was the third time in a row that the government reduced the benchmark price.
“Falling China’s coal consumption has caused the benchmark price for this month to drop,” said the energy ministry on its statement. However, the November benchmark price rose 3.16% from USD 94.80/MT in November 2017.
China’s import control policy, higher use of hydro and other renewable energy, as well as weakening yuan against the US dollar have dampened China’s appetite for sub-bituminous coal, which accounts for more than 60% of Indonesia’s coal exports.
In addition, weakening rupee against the US dollar has also capped India’s demand for Indonesian coal. India and China are two main buyers of Indonesian coal.
The Indonesian coal benchmark price is calculated on calorific value of 6,322 kcal/kg basis. The formula is an average of the Indonesia Coal Index (ICI-1), Platts-5900, Newcastle Export Index (NEX) and globalCoal Index. The benchmark is used for both spot and term contracts.
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