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Friday, 30 October 15
INDONESIA'S COAL EXPORTS DROP ON LOW PRICES - THE JAKARTA POST
Jakarta Post LogoIndonesia's coal exports significantly dropped in the first nine months of the year as coal companies continued to suffer from low prices in addition to becoming increasingly dependent on the domestic market.

According to The Jakarta Post's report, the figures from the Energy and Mineral Resources Ministry’s directorate general for minerals and coal showed that national production reached 308 million tons from January to September this year, declining by around 14 percent compared to the 360 million tons produced in the same period of last year.

“Out of total production, 235 million tons were exported,” director for coal, Adhi Wibowo, said, as quoted by the Jakarta post.

The paper further reported that, the export figure was equal to an almost 20 percent drop compared with the 293 million tons sold overseas during the January to September period of last year. Around 6 million tons of coal is currently in inventories, a similar level at the end of September last year, according to Adhi.

According to paper, as much as 67 million tons were sold to domestic markets during the first nine months of the year, increasing by around 9 percent compared to the 61 million tons delivered to domestic buyers in the same period last year.

Coal mining firms have been struggling to survive amid a challenging business environment marked by low commodity prices partly caused by weakening demand against the backdrop of global economic uncertainties.

The government set the Indonesian coal reference price (HBA) at US$57.39 per ton in October, an all-time low since the reference was first introduced in 2009. The HBA price is currently 10 percent lower compared to the $63.84 per ton set for January.

The price at Australian port Newcastle, the benchmark for thermal coal, dropped to $54.37 per ton in April, the lowest level since May 2007, Bloomberg reported. Prices continued sliding over the last the three months, the longest run of declining prices since April 2014, Bloomberg added.

The government of Indonesia plans to see national coal production hit 425 million tons by the year’s end. The coal mining business remains a significant contributor to the country’s revenue of non-tax income. However, given the pressure on prices, output is expected to be well below 400 million tons this year. 


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