- Cost-driven demand supports fresh benchmark highs
- Restocking supports demand, while ample supply limits upside
Indonesia’s Harga Batubara Acuan (HBA) thermal coal benchmarks showed a mixed trend in the second half of August 2026, with higher- and mid-calorific coal remaining relatively subdued while lower-CV grades continued to strengthen.
The movement reflects a gradual improvement in demand for mid- and lower-CV coal, alongside relatively softer sentiment in the high-CV segment. Indonesia’s HBA benchmarks are influenced by prevailing seaborne coal prices and domestic market conditions.
High-CV coal holds steady amid muted buying
The benchmark HBA for 6,322 kcal/kg GAR coal remained unchanged at $124.06/t in the second half of August, following a 6% decline to $124.44/t in the first half of the month as compared to second half of July. The stability suggests that high-CV coal demand remains relatively balanced, with buyers maintaining a cautious procurement approach amid adequate availability and limited urgency for additional high-grade cargoes.
Mid-CV coal gains on improving demand
The HBA-I benchmark for 5,300 kcal/kg GAR coal increased 4% to $96.92/t, marking a notable recovery after the weaker performance of the high-CV segment. The rise was supported by improving buying interest for competitively priced mid-CV coal, particularly from price-sensitive Asian buyers seeking to optimise fuel costs while maintaining acceptable calorific value. The segment is also benefiting from its broader suitability across utility and industrial applications.
Lower-CV coal extends record-high run
Lower-calorific coal continued to outperform, with the 4,100 kcal/kg GAR HBA-II rising nearly 0.5% to $65.81/t, while the 3,400 kcal/kg GAR HBA-III edged up 0.2% to $45.34/t. Both benchmarks reached fresh record highs under the current pricing framework. The sustained strength reflects firm demand for lower-cost fuel, particularly as buyers remain focused on reducing delivered fuel costs and blending higher- and lower-CV coal where operationally feasible.
Key factors supporting the lower-CV segment
The stronger performance of lower-CV coal is being underpinned by price competitiveness, improving Asian buying interest and a preference for cost-effective fuel alternatives. Meanwhile, Indonesian supply-side developments remain an important market variable. Production and export availability, domestic market obligations and weather-related mining and logistics disruptions could influence near-term availability and price direction. Indonesia’s export policies and DMO requirements can also create divergence between domestic supply conditions and international benchmark movements.
Outlook
Indonesian thermal coal prices are expected to remain range-bound to moderately firm, with mid- and lower-CV grades likely to outperform high-CV coal. Post-monsoon restocking and improving Asian demand may provide support, while ample supply and cautious buying could cap upside in high-CV grades. Cost competitiveness is expected to remain the key driver for lower-CV coal demand.
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