Mining News: Indonesia's Coal Price Falls Again in March 2017
For the third consecutive month Indonesia's benchmark coal price declined. This price (in Indonesian: Harga Batubara Acuan, or HBA), which is based on a selection of domestic and international coal indices, is set on a monthly basis by Indonesia's Energy and Mineral Resources Ministry. For March 2017, the HBA was set at USD $81.90 per metric ton, down 19.5 percent from its recent peak of USD $101.69 per ton in December 2016.
Energy and Mineral Resources Ministry spokesman Sujatmiko said there are two factors that explain the decline of Indonesia's coal price; both factors are so-called external factors. Firstly, global coal demand has declined after the winter season. The winter months always cause a peak in coal demand. Secondly, working days in China's coal mines are back to normal levels, implying coal output in China rises.
Despite the recently declining coal price, conditions in the coal mining sector are currently still much more appealing compared to conditions one year ago. The March 2017 HBA price is still 58.7 percent higher compared to the price in the same month last year. Therefore, Indonesian miners remain optimistic about their earnings in 2017. Hendra Sinadia, Deputy Executive Director of the Indonesian Coal Mining Association (APBI) informed that local coal producers now target to produce a total of 470 million metric tons of coal in 2017, which would be 8.2 percent higher from total coal production in Indonesia in 2016. However, obviously, rising coal output would put some downward pressure on coal prices.
This target is also significantly higher than the government target of 413 million tons that was set in the National Medium‐Term Development Plan (RPJMN) 2015-2019.
Read more: Overview of Indonesia's Coal Mining Industry
The HBA is based for 25 percent on the Platts Kalimantan 5,900 kcal/kg GAR assessment; 25 percent on the Argus-Indonesia Coal Index 1 (6,500 kcal/kg GAR); 25 percent on the Newcastle Export Index (6,322 kcal/kg GAR), and 25 percent on the globalCOAL Newcastle (6,000 kcal/kg NAR) index.
Indonesian Government's Benchmark Thermal Coal Price (HBA):
| Month | 2012 | 2013 | 2014 | 2015 |
2016 | 2017 |
| January | 109.29 | 87.55 | 81.90 | 63.84 | 53.20 | 86.23 |
| February | 111.58 | 88.35 | 80.44 | 62.92 | 50.92 | 83.32 |
| March | 112.87 | 90.09 | 77.01 | 67.76 | 51.62 | 81.90 |
| April | 105.61 | 88.56 | 74.81 | 64.48 | 52.32 | |
| May | 102.12 | 85.33 | 73.60 | 61.08 | 51.20 | |
| June | 96.65 | 84.87 | 73.64 | 59.59 | 51.87 | |
| July | 87.56 | 81.69 | 72.45 | 59.16 | 53.00 | |
| August | 84.65 | 76.70 | 70.29 | 59.14 | 58.37 | |
| September | 86.21 | 76.89 | 69.69 | 58.21 | 63.93 | |
| October | 86.04 | 76.61 | 67.26 | 57.39 | 69.07 | |
| November | 81.44 | 78.13 | 65.70 | 54.43 | 84.89 | |
| December | 81.75 | 80.31 | 69.23 | 53.51 | 101.69 |
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 | 461 |
| Export (in million tons) |
163 | 191 | 198 | 210 | 287 | 345 | 402 | 382 | 366 |
| Domestic (in million tons) |
61 | 49 | 56 | 65 | 66 | 67 | 72 | 76 | 87 |
| 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