The Indonesia’s benchmark price benchmark reference price also known as Harga Batubara Acuan, or HBA that saw a correction of 4% last month has recovered by 2.6% m-o-m in Apr ’21 at $86.7/t.
Towards March-end, seaborne inquiries for Indonesian coal from China increased due to lower-than expected rains in the country which reduced hydropower availability, the Datong-Qinhuangdao railway maintenance work, and closure of Inner Mongolia borders amid rising COVID-19 cases. In the current scenario, Chinese demand is expected to remain elevated in April and has resulted in the HBA price rising for the month.
HBA price trend
The HBA price fell continuously from April-Oct’20 due to pandemic-led lower demand, but recovered significantly between Nov’20-Feb’21 amid Chinese ban on Australian coal and subsequent increase in demand from the country, more-than-usual colder winters, and industrial activity picking up pace globally post lifting of Covid restrictions.
It was only last month i.e. in Mar’21 that the HBA price fell due to diminished demand from China as towards the end of winters electricity consumption in Chinese business centres fell.
Indonesian spot prices also rise
Indonesian thermal coal spot prices have also been rising for the past two weeks. Currently the price for popular grade 4200 GAR is assessed at $43.9/t, FoB basis.
The Chinese are back in the market for booking Indonesian coal. However, most Indian buyers are still on the sidelines, in anticipation of a price correction by next week, as China is increasing its domestic production and having purchased enough cargoes until first half of May. They further expect that once Labor Day holidays are over and hydropower supply improves in China, demand in the said country might slip, leading to Indonesian coal price correction in May.
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