Indonesia has raised coal benchmark price in Jul’18 to USD 104.65/MT, from USD 96.61/MT in Jun’18, according to the Energy and Mineral Resources Minister’s decree posted on the ministry’s website.
It’s the highest price since Apr’12, when the benchmark was increased to USD 105.61/MT. Jul’18 benchmark price had also gained 8.3% on the month from Jun’18.
The ministry didn’t give reasons for the surge. But, robust demand from China and India coupled with loading problems in some ports in Indonesia’s key coal producing regions may have boosted prices.
The benchmark hit the highest price of USD 127.05/MT in February 2011, since its inception in January 2009.
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.
Indonesian Coal Offers:
Indonesian coal offers have come down this week as buyers in China and India stayed largely on the sidelines while waiting for price corrections.
Chinese buyers were competent with the rising domestic coal supply, while the Indian buyers were also not in a hurry to book their vessels after they had pre-stock sufficient coal for the monsoon season.
An Indian trader has anticipated the Indonesian coal price are set to fall during the month, with the decline in buying sentiments from Chinese and Indian buyers.
He added that the demand for Indonesian coal will be lowered in China as the summer season there draws to a close, which in turn would record more hydro-power generation in the country to provide much needed relief to the thermal power generation. Besides, the depreciation in rupee value against US Dollar would also affect Indian coal buying.
Indonesian 4200 GAR coal was offered at USD 48.50-49/MT, FoB Kalimantan this week. 3800 GAR coal was offered at USD 39-40/MT on FoB basis against bids at USD 37-38/MT.
Indonesian mid CV coal offers had witnessed a correction of USD 3-4/MT this week. Offer for 5000 GAR coal was assessed at USD 66-67/MT, FoB Kalimantan. Offer for 4800 GAR coal was USD 63-64/MT on FoB basis, however, workable limit for this grade was heard at USD 56-57/MT.
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