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Monday, 17 August 15
INDONESIAN THERMAL COAL REFERENCE PRICE HITS RECORD LOW AGAIN!
 COALspot.com - The Director General of Mineral and Coal of Indonesia revised down Indonesian coal benchmark price once again to US$ 59.14 per MT for 6322 GAR coal for August 2015 delivery. The August price reference for Indonesian coal declined just 0.03% or US cents 2 per MT month over month and lost 7.36% year to date.
According to the date from Director General shows that, the government has fixed US$ 14.61 per MT (decline 0.07% month on month) for the coal with calorific value 2,995 kcal/kg on GAR with total moisture 50.10% on as received basis for August 2015 delivery. The royalty and taxes will be calculated based on this declared HPB. In the meantime, the government also fixed US$ 42.93 per MT as HPB for 5000 GAR coal with total moisture 22.40%, Ash 8.90% and Sulphur 0.54% for August 2015 deliveries.
Indonesian thermal coal reference price or called HBA recorded the lowest level in 80 months in August or since launching of HBA by the government of Indonesia in January 2009.
Indonesian coal benchmark price for August 2015 was calculated based on calorific value of 6,322 kcal/kg (GAR), stated to be using a formula based on the July 2015 index average of ICI-1 (Indonesia Coal Index) 25%, Platts-5900 25%, NEX (Newcastle Export Index) 25%, and GC (globalCoal Index) 25% and its was calculated considering coal with GCV (GAR) 6,322 kcal/kg, Total Moisture (arb) 8.00%, Total Sulphur 0.8% (arb), Ash Content 15 % (arb) and delivery free on Board (FOB) Vessel basis and apply to spot contract, delivery between 1 – 31 August 2015.
The highest benchmark price was declared by the Ministry of Energy & Mineral Resources of Indonesia in February 2011 and compared today's price the February 2011 price was higher by US$ 67.91 per MT.
The government of Indonesia was publishing a monthly coal price reference (HBA & HPB) since January 2009 to be used by coal producers for all spot and term contracts. However, the official implementation of HBA was commenced since September 2011. According to government regulation, the coal benchmark price must be used by the holders of production operation IUPs, special production operation IUP's, and CCoWs as a reference in determining the coal selling price for a particular period.
The declared HBA in August 2015 was 15.86 per cent or $ 11.15 lower compared to the same period in 2014.
HBA of February 2011 was the highest since the launching of HBA by the government of Indonesia (US$ 127.05 / MT for 6322 GAR coal) and the lowest was declared in this month (US$ 59.14/ MT).
This month declared price is only valid for the spot price (loading on or before 31 August 2015), while as for term price (up to 12 months supply), the average reference price (HPB) of the previous three months will be used to determine the selling price. (50% of the latest available month HPB (this month) 30% one month prior HPB and 20% of two-month prior HPB).
The government also declared price marker for eight brands of Indonesia's coal, which are most commonly traded in the market. Those eight brands act as the benchmark and used to calculate other 66 coal types with a quality similar to the coal price markers.
For sales in the barge, the reference price is reduced by barging and trans-shipment costs from the barge to the vessel. The government has recently issued a regulation (644.K/30/DJB/2013 dated 21 March 2013) to regulate or determine coal prices on FOB barge. The government also fixed the freight for barging, surveyor, insurance and etc., to determine FOB barge price. Transshipment cost US$ 4.00/MT + Surveyor cost US$ 0.25/MT + Insurance 0.80% per shipment + Barging cost (for 270 footer - (US$ 0.0221 X barging distance) + US$ 3.7406, for 270 - 330 footer - (US$ 0.0184 X barging distance) + US$ 3.1172 and > 330 footer - (US$ 0.0154 X barging distance) + US$ 2.6002.
The coal price reference is being established to fulfill the requirement of mining law 04/2009 and ministerial decree No.17/2010. In addition to that, it aims to increase government revenue from royalties from coal producers.
The excess of coal supplies and weak demand, fast developments of renewable energy and fall in oil prices are still to be blamed for delay of price recovery or falling of prices. Today’s price levels are not supporting any new investments or new explorations in coal mines.
According to reports, the free cash flow of various Indonesian coal miners have turned negative, the generated cash from coal production cannot cover companies’ operational costs. Big Indonesian coal players are now eager to diversify into other businesses such as power generation and logistics.
Low coal prices have big implications for exporting countries like Indonesia, Australia, South Africa and Russia. We believe it will take several years to recover fully as the supply is still quite higher compare to the demand and also the price of oil has also falling drastically. The price of oil fallen from more than $100 per barrel in June 2014 to under $49 today.
However according to Medium-Term Coal Market Report 2014, the global coal demand growth has been slowing in recent years, and the report sees that trend continuing. Coal demand will grow at an average rate of 2.1% per year through 2019.
According to the report, the global demand for coal over the next five years will continue marching higher, breaking the 9-billion-tonne level by 2019. The report notes that despite China’s efforts to moderate its coal consumption, it will still account for three-fifths of demand growth during the outlook period. Moreover, China will be joined by India, ASEAN countries and other countries in Asia as the main engines of growth in coal consumption, offsetting declines in Europe and the United States.
The government of Indonesia is also implemented a new income tax of 1.5% on the delivery value to domestic or export value of the coal starting from 8 August 2015. The new tax would be levied on IUP holders or Izin Usaha Pertambangan and not on Coal Contract of Works or CCoW holders. Holders of Coal Contract of Works are exempted from this new tax. However CCoW holders are dominating Indonesian coal industry or approximately 75% of coal output is coming from those big scale miners in Indonesia.
It would be nice to see coal prices settle at a point where both the producer and consumer can sustain. Will it happen any time soon……..?
Click here for full details of Indonesian coal price reference since January 2009.(cs).
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Friday, 04 September 15
GOVERNORS WILL HAVE THE POWER TO REVOKE MINERS' PERMITS: ENERGY MINISTRY - JG
Starting Oct. 1, Indonesia's governors will lawfully become "executors" in revoking the licenses of miners that fail to secure a &quo ...
Thursday, 03 September 15
MINISTRY OF ENERGY AND MINERAL RESOURCES OF INDONESIA TO REVISE HBA METHODOLOGY
COALspot.com: Ministry of Energy and Mineral Resources (ESDM) in process to revise Indonesian Coal Price Reference (HBA) and expected to complete b ...
Thursday, 03 September 15
THE CHINESE STOCK MARKET AND THE CHINESE ECONOMY CONTINUE TO SUBSTANTIALLY AFFECT TRADING - INTERMODAL
The last week of the summer season saw the BDI dipping further on the back of another significant drop in rates for Capes, which brought the market ...
Wednesday, 02 September 15
PORT OF NEWCASTLE SHIPPED 13.46 MMT OF COAL IN JULY; UP 0.66 PER CENT M-O-M
COALspot.com: The Port of Newcastle, Australia’s major trading ports and the world’s largest coal export port, has shipped $1.224 billi ...
Wednesday, 02 September 15
SHIPPING MARKET INSIGHT - GEORGE ILIOPOULOS
In the beginning of the summer period SnP activity was firm with numerous buyers, coming mainly from Greece and the Far East, inspecting ships and ...
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- Meenaskhi Energy Private Limited - India
- Alfred C Toepfer International GmbH - Germany
- Antam Resourcindo - Indonesia
- Ministry of Finance - Indonesia
- Vedanta Resources Plc - India
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- Baramulti Group, Indonesia
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- GN Power Mariveles Coal Plant, Philippines
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- Cigading International Bulk Terminal - Indonesia
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- Global Coal Blending Company Limited - Australia
- Directorate General of MIneral and Coal - Indonesia
- Ministry of Mines - Canada
- Africa Commodities Group - South Africa
- White Energy Company Limited
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- Planning Commission, India
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- London Commodity Brokers - England
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- Simpson Spence & Young - Indonesia
- Australian Coal Association
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- Coal and Oil Company - UAE
- Videocon Industries ltd - India
- Posco Energy - South Korea
- Coastal Gujarat Power Limited - India
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- Samtan Co., Ltd - South Korea
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- Petrochimia International Co. Ltd.- Taiwan
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- Leighton Contractors Pty Ltd - Australia
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- Ambuja Cements Ltd - India
- Vizag Seaport Private Limited - India
- CIMB Investment Bank - Malaysia
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- Thai Mozambique Logistica
- Electricity Generating Authority of Thailand
- Metalloyd Limited - United Kingdom
- Australian Commodity Traders Exchange
- Petron Corporation, Philippines
- Makarim & Taira - Indonesia
- Trasteel International SA, Italy
- Central Electricity Authority - India
- Barasentosa Lestari - Indonesia
- PowerSource Philippines DevCo
- Manunggal Multi Energi - Indonesia
- Marubeni Corporation - India
- Indian Energy Exchange, India
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- Bahari Cakrawala Sebuku - Indonesia
- New Zealand Coal & Carbon
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- Kaltim Prima Coal - Indonesia
- Banpu Public Company Limited - Thailand
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- PetroVietnam Power Coal Import and Supply Company
- Bukit Asam (Persero) Tbk - Indonesia
- Aditya Birla Group - India
- Grasim Industreis Ltd - India
- International Coal Ventures Pvt Ltd - India
- VISA Power Limited - India
- Oldendorff Carriers - Singapore
- Pipit Mutiara Jaya. PT, Indonesia
- Commonwealth Bank - Australia
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- Gujarat Sidhee Cement - India
- Indogreen Group - Indonesia
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- Chamber of Mines of South Africa
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- The University of Queensland
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- Karbindo Abesyapradhi - Indoneisa
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