Indonesian Coal Association: Coal Price to Remain around $50/ton in 2016
The Indonesian Coal Mining Association (APBI) expects the coal price to remain stable around USD $50 per ton in the remainder of 2016. Indonesia's benchmark thermal coal price (harga batubara acuan, abbreviated HBA), which is set (on a monthly basis) by the Energy and Mineral Resources Ministry, rose 1.4 percent (m/m) to USD $52.32 per ton in April 2016. Since February the HBA has been climbing in three consecutive months. The last time Indonesia's benchmark coal price recorded a three-month gaining streak was in the October-December 2013 period.
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