Indonesia raises highest-CV thermal coal reference price for first half of April

• ESDM cuts mid-CV HBA-I, low-CV HBA-III by 3%
• Exporters continue to prefer ICI over HBA pricing

Mysteel Global: Indonesia’s Ministry of Energy and Mineral Resources (ESDM) raised its thermal coal reference prices (Harga Batubara Acuan, or HBA) for the highest-calorific value (CV) grade for the first half of April, while cutting or holding prices of lower-CV grades, according to the ministry’s latest release.

The ESDM has published the HBA prices twice a month (on the 1st and 15th day of each month) since March, replacing its previous monthly updates to better reflect market dynamics.

Specifically, the HBA for 6,322 kcal/kg GAR coal (TM 12.26%, sulphur 0.66%, ash 7.94%) – a grade with high CV – was set at $123.32/tonne (t) for the first half of this month, up by 4.7% from the second half of March, the release showed.

The HBA-I price, gauging mid-CV 5,300 Kcal/kg GAR coal (TM 21.32%, sulphur 0.75%, ash 6.04%), was reduced by 2.9% from mid-March to $78.4/t, the ESDM data showed. Notably, it is the lowest since the HBA derivative was first released in March 2023.

Meanwhile, the Jakarta government set low-CV HBA-II – gauging 4,100 kcal/kg GAR (TM 35.73%, sulphur 0.23%, ash 3.9%) – at $49.54/t for the first half of April, almost unchanged from $49.44/t for the second half of March. The HBA-III for 3,400 kcal/kg GAR (TM 44.3%, sulphur 0.24%, ash 3.88%) was pegged at $32.71/t, down by 3%. The HBA-III has touched its lowest level since December 2023, Mysteel Global observed.

In late February, the ESDM directed Indonesian coal exporters to use the HBA and derivatives to price transactions. But Mysteel Global has learnt that exporters seem to prefer to use the Indonesia Coal Index (ICI) – collectively produced by Indonesian NGO PT Coalindo Energy and industry agency Argus and updated on Fridays – for transactions.

Last Friday, the ICI 1 index – gauging 6,500 kcal/kg GAR – was set at $109.42/t, down by $1.61/t from a week ago. Based on this, the price for 6,322 kcal/kg GAR cargo was converted to $102.99/t, down by $1.45/t w-o-w. The price is much lower compared with the HBA for this grade.

Meanwhile, based on ICI 4 for 4,200 kcal/kg GAR grade, the 4,100 kcal/kg GAR grade was pegged at $47.56/t, which was $1.98/t lower than the latest HBA-II price.

“There will be a transition period for customers shifting from the ICI index to HBA, during which buyers and sellers will negotiate to ensure the effective execution of long-term contracts,” said an Indonesian miner. “This transition could be challenging for both parties,” he admitted.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.