Indonesian Coal Association: Coal Price to Remain around $50/ton in 2016

Hendra Sinadia, Deputy Director of APBI, said "if we take into account the development of the coal price in recent months, it seems to stabilize around USD $50 per ton. Therefore, we predict that the coal price will remain around this level for the remainder of the year." Moreover, the recently rising crude oil prices - with Brent crude and West Texas Intermediate hovering just above the USD $40 per barrel level - encourage other commodity prices to rise accordingly.

Sinadia also expects to see rising coal demand in the remaining quarters of the year, and further rising demand in 2017. His forecast is particularly based on the government's ambitious 35,000 megawatt (MW) power plan. The Indonesian government wants to add total power capacity of 35,000 MW in the next four years. The majority of these power plants will be coal-fired hence stimulating domestic coal demand.

On Wednesday, the world's largest privately-owned coal producer, US-based Peabody Energy Corp, filed for bankruptcy protection after its debt burden became too high. Peabody Energy is one of the many coal mining companies across the globe that experienced severe financial troubles due to the low coal prices. After 2011 prices went downhill due to weak global economic growth (especially dragged down by the slowdown in China), while cheap (and cleaner) gas became a key rival of coal.

Indonesian Government's Benchmark Thermal Coal Price (HBA):

Month	2012	2013	2014	2015	2016
January	109.29	87.55	81.90	63.84	53.20
February	111.58	88.35	80.44	62.92	50.92
March	112.87	90.09	77.01	67.76	51.62
April	105.61	88.56	74.81	64.48	52.32
May	102.12	85.33	73.60	61.08
June	96.65	84.87	73.64	59.59
July	87.56	81.69	72.45	59.16
August	84.65	76.70	70.29	59.14
September	86.21	76.89	69.69	58.21
October	86.04	76.61	67.26	57.39
November	81.44	78.13	65.70	54.43
December	81.75	80.31	69.23	53.51

^{in USD/ton
Source: Ministry of Energy and Mineral Resources}

Indonesian Production, Export, Consumption & Price of Coal:

	2007	2008	2009	2010	2011	2012	2013	2014	2015
Production (in million tons)	217	240	254	275	353	412	474	458	376
Export (in million tons)	163	191	198	210	287	345	402	382	296
Domestic (in million tons)	61	49	56	65	66	67	72	76	80
Price (HBA) (in USD/ton)	n.a	n.a	70.7	91.7	118.4	95.5	82.9	72.6	60.1

^{Sources: Indonesian Coal Mining Association (APBI) & Ministry of Energy and Mineral Resources}

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