COALspot.com: Indonesian Coal Price Reference for February in a steep climb from January 2022.
As expected in January the Indonesia ban on coal exports drives up coal price prices in Global Market. Indonesia, the world largest exporter of thermal coal has banned coal exports in January 1, 2022 until almost end of the January 2022.
The Indonesian Coal Price Reference rose dramatically from US$ 158.50 in January 2022, to US$ 188.38 in this month, as the demand for coal took hold and supply is failing to follow the trend of the demand.
Supply disruptions, coal export ban from Indonesia, Ukraine crisis and rebounding electricity demand have driven up the market for thermal coal, making thermal coal one of the best-performing fuel last 12 months. Since the September 2020, the price of 6322 GAR coal - the benchmark for the Indonesian Coal Price Reference - has climbed 281.18% to above US$ 188 a tonne, its second highest level of history of HBA.
This month's Indonesia coal price reference which was calculated based on average of January 2022 Index of four international coal indices has increased 18.85% month on month. The Indonesia coal price reference for the month of February 2022 declared at US$188.38 for exports. The selling price of coal for the domestic power plants, which is supplying power to state-owned electricity company (Perusahaan Listrik Negara (PLN), is still capped at $70 per Ton for February 2022 delivery. In the meantime, the selling price of coal for the domestic Cement & Fertilizer plants, is capped at $90 per Ton for February 2022 delivery.
Y-O-Y : Up US$ 100.59 | 114.58%
Y-T-M : Up US$ 29.88 | 18.85%
M-O-M : Up US$ 29.88 | 18.85%
The Ministry of Energy and Mineral Resources of the Republic of Indonesia revised up the benchmark price of Indonesian thermal coal for February 2022 loading by US$ 29.88 per ton compared to January 2022 price.
The declared Indonesian thermal coal price reference for February 2022 delivery is 281.18% higher compared to that in September 2020 price.
An increase or decrease in four coal indices such as Indonesia Coal Index (ICI), Platts-5900, Newcastle Export Index (NEX) and Global coal Newcastle Index (GCNC) will cause an increase or decrease in Indonesian coal price reference every month, as HBA is linked to those coal indices.
The coal price reference in Indonesia was established to fulfil 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 declared Indonesia thermal coal reference price (or called HBA) for September 2020 was the lowest in 158 months or since launching of HBA by the government of Indonesia. The royalties and taxes will be calculated based on this declared HPB.
Indonesian coal benchmark price for February 2022 was calculated based on calorific value of 6,322 kcal/kg (GAR), stated to be using a formula based on the January 2022 index average of ICI-1 (Indonesia Coal Index) 25 per cent, Platts-5900 25 per cent, NEX (Newcastle Export Index) 25 per cent, and GC (globalCoal Index) 25 per cent 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- 28 February 2022 or until publish an new Coal Price Reference (HBA).
The government of Indonesia is publishing a monthly coal price reference (HBA & HPB) since February 2009 to be used by coal producers for all spot as well as term contracts.
However, the official implementation of HBA was commenced since September 2011 and 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 this month is valid for the spot price (loading on or before 28 February 2022 or until issuing an new HBA), while (as per previous HBA note) 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. (A 50 per cent of latest month's HPB (the current month), a 30% one-month prior HPB and a 20% of two-month prior HPB).
The government used to declare the price marker for eight brands of Indonesia's coal, which were most commonly traded in the market. Those eight brands act as the benchmark and used to calculate other 69 coal types with a quality similar to the coal price markers. However, this time, the government was issued price for HBA and no HPB prices was published.
COALspot.com, used its own calculator which is developed based on HBA/HPB formula and terms and condition declared by DGoMC to calculate HPB prices for eight major brands and for other types of coals. The government has stopped declaring formulas or methodologies that used to calculate either HBA or HPB. COALspot.com now publishing HPB and other coal prices based on HBA declared in this month.
Click here for details of Indonesian coal price reference since January 2009.(cs).
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