The Indonesian thermal coal benchmark price (HBA) in April dropped to USD 65.77 per metric ton (MT) due to the impact of corona virus (Covid-19) which compelled the affected countries to reduce import demand. Compared to March, this month’s HBA dropped by USD 1.31/MT from USD 67.08/MT.
The HBA in January 2020 was recorded at USD 65.93/MT, down from December 2019 at USD 66.30/MT. The HBA has fluctuated, rising in February at USD 66.89/MT and in March at USD 67.08/MT, and has again fallen this April 2020.
The head of communications bureau at the Ministry of Energy and Mineral Resources (ESDM) Agung Pribadi said the reduced electricity consumption in the countries affected by Covid-19 caused coal demand in these countries to decline which had an impact on the occurrence of a slight over supply of coal globally. This affected the decline in four coal price indices that are commonly used in world coal trading, namely the Indonesia Coal Index (ICI), the Newcastle Export Index (NEX), the Global Coal Newcastle Index (GCNC), and Platt’s 5900 in the previous month.
“The average ICI monthly index fell 2.66%, Platt’s fell 2.75%, GCNC fell 1.77%, NEX fell 0.66%. Because of these four indices have decreased, the HBA which is influenced by the the indexes will certainly also go down,” he said in a written statement, Monday, (04/04/2020). Agung further said, the decline in the coal price index was one of them triggered by reduced electricity demand in countries affected by the Covid-19 pandemic.
“Work From Home policy in several countries have resulted in a decrease in electricity consumption in several capitals and business centers which has an impact on lower coal demand,” he added. “From the calculation of the average of the four indices, the HBA figure is proposed to be USD 65.77/MT, or a decrease of USD 1.31/MT from the March HBA at USD 67.08/MT.”
The HBA for April will be used for direct sales (spot) for one month at the point of sale for Free on Board on a transport vessel (FOB Vessel).
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