Coal miners in Indonesia estimate that their coal exports will experience a downfall in the second quarter of this year due to the ongoing coronavirus (Covid-19) pandemic.
Executive Director of the Indonesian Coal Mining Association (ICMA) Hendra Sinadia said that this would cause coal prices to fall quite sharply because all indices forming the Indonesian thermal coal benchmark price (HBA) were in a downward trend.
“The price of coal will decline sharply in the second quarter in 2020”, Hendra said.
He said the decline in demand is expected to continue in May and June because market conditions are oversupply where China’s domestic supply is smooth, while stockpiles are still large enough to reduce their interest in imports.
“While India is still in a lockdown situation and imports have been corrected, the Indian government is also optimizing their domestic coal supply to reduce imports”, he said.
The current conditions are indeed difficult for entrepreneurs. Companies that have contracted are certainly trying to meet the supply in accordance with the contract by continuing to implement strict work protocols to prevent the spread of the corona virus so that supply is not interrupted.
“In a situation like this the company is trying hard to maintain its cash flow and implement tight efficiency including delaying or expanding of future projects”, said Hendra.
Meanwhile, the HBA declined again in May 2020 to USD 61.11 per metric ton (MT). The January HBA recorded a figure at USD 65.93/MT, down from USD 66.30/MT in December 2019. Then it rose in February to USD 66.89/MT and March at USD 67.08/MT. Then the HBA declined again in April which reached USD 65.77/MT.
Based on data from the Indonesian ministry of energy and mineral resources, the coal production realization until May 6 reached 193.82 million tons (MnT) or 35.24 percent of the planned 550 MnT production. Then, the realization of exports up to May 6 reached 100.05 MnT or 25.33 percent of the planned 395 MnT.
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