Indonesia has increased coal benchmark price in August to USD 107.83 in Aug’18, a 3% from USD 104.65/MT in Jul’18, according to the Energy and Mineral Resources Minister’s decree posted on the ministry’s website, on 3 Aug’18.
The August price is the highest since March 2012.
There was no explanation why the government increased the August benchmark. However, extreme summer weather in northern hemisphere has boosted coal demand for electricity generation as houses and offices increased the use of air-conditioning to cool off.
Australian thermal coal prices have spiked to the highest in six years because of summer demand, Reuters reported on 2 Aug’18. According to Reuters, spot thermal coal cargo prices at Australia’s Newcastle terminal coal settled at USD 121.75/MT, their highest since February 2012.
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.
The benchmark hit a record of USD 127.05/MT in February 2011, which was its highest since it was launched in January 2009.
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