Reference Coal Price in August 2022 Increases to US$ 321.59 per Ton, This is the Trigger

Reference Coal Price in August 2022 Increases to US$ 321.59 per Ton, This is the Trigger

European gas supply conditions have a major influence in determining the August 2022 Reference Coal Price (HBA) increase of US$ 2.59 per tonne from the previous month. Thus, the August 2022 HBA will increase to US$ 321.59 per ton.

“The price of liquefied natural gas in Europe continues to climb following the uncertainty of gas supply. Some European countries have even reactivated coal power plants in anticipation of an electricity crisis,” said the Head of the Communication, Public Information Services and Cooperation Bureau (KLIK) of the Ministry of Energy and Mineral Resources Agung. Personally via press release, Tuesday (2/8/2022).

Agung said other factors that influenced the price increase were the surge in demand for coal from China, India and South Korea. “This is because Russia offers a discount on coal prices,” he said. This increase recorded a positive trend in coal prices throughout 2022. In January 2022, the HBA was set at US$158.50 per tonne, rising to US$188.38 per tonne in February. Furthermore, March touched the figure of US$203.69 per ton, April was at US$288.40 per ton, May was at the level of US$275.64 per tonne, and June was at US$323.91 per tonne. “Last month (July) it fell to US$319 per ton.

In August 2022, HBA rose to US$ 321.59 per ton,” he said. HBA itself is a price obtained from the average index of the Indonesia Coal Index (ICI), Newcastle Export Index (NEX), Globalcoal Newcastle Index (GCNC), and Platt’s 5900 in the previous month, with quality equivalent to 6322 kcal calories per kilogram GAR, 8 percent Total Moisture, 0.8 percent Total Sulfur, and 15 percent Ash. Agung added that the August HBA increase was also influenced by the increase in the average index. The monthly HBA compilers, namely NEX rose 3.75 percent, GCNC rose 3.32 percent, ICI fell 3.94 percent, and Platt’s fell 3.58 percent.

For information, there are two derivative factors that affect the movement of HBA, namely, supply and demand. In terms of supply derivatives, it is influenced by season (weather), mining techniques, supplier country policies, to supply chain technicalities such as trains, barges, and loading terminals.
Meanwhile, for the derivative of demand, it is influenced by declining electricity demand, which correlates with industrial conditions, import policies, and competition with other energy commodities, such as LNG, nuclear, and hydro. In addition, the government has also set a domestic HBA specifically for electricity at US$70 per tonne and US$90 per ton for domestic HBA for industrial fuel needs. “This maintains the competitiveness of the domestic industry and mainly ensures the affordability of industrial production for the community.