The Indonesian government has set its thermal coal benchmark price (HBA) for September at $49.42/t — slightly lower than $50.34/t in August.
The Ministry of Energy and Mineral Resources stated that the persistent decline in the coal price was primarily due to weak demand at home as well as in the global market amid the Covid-19-triggered economic downturn, especially in the key export markets of China and India.
Ministry spokesperson Agung Pribadi said that the tightening of coal import by China and India, as both the countries seek to prioritize the use of domestically produced coal, has considerably diminished demand for the commodity’s exports from Indonesia.
“The ongoing pandemic caused a substantial decline in Chinese coal imports by as much as 20 percent, while demand from India has not yet recovered after the lockdown”, he added.
The HBA price for thermal coal, locally known as Harga Batubara Acuan, is the basis for determining the prices of 77 Indonesian coal products and calculating the royalty amount required to be paid by producers for each metric ton of coal sold.
- It is based on 6,322 kcal/kg GAR coal with 8% total moisture content, 15% ash and 0.8% sulfur as received.
- The HBA is formed by four coal indices, namely Indonesia Coal Index (ICI), Newcastle Export Index (NEX), Globalcoal Newcastle Index (GCNC), and Platt’s 5900.
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