Commodity Supercycle Pushes February HBA to USD87.79 per Tonne

MINISTRY OF ENERGY AND MINERAL RESOURCES

PRESS RELEASE

NUMBER: 049.Pers/04/SJI/2021

Date: 4 February 2021

Commodity Supercycle Pushes February HBA to USD87.79 per Tonne

The Indonesian Coal Benchmark Price (HBA) for February 2021 has increase in line with sentiment formed by commodity supercycle. The February HBA has been set at USD87.79 per tonne, or picking up by 15.7% from the previous month of USD75.84 per tonne.

"Commodity supercycle, such as the rise in gas price, has raised coal price," said Head of Bureau of Communication, Public Information Services, and Cooperation of Ministry of Energy and Mineral Resources (EMR) Agung Pribadi in Jakarta on Thursday (4/2).

The supercycle signal, continued Agung, is believed to occur in 2021 to various commodities, especially mining commodities. The triggers include low interest rates, a weaker US dollar, economic growth, and infrastructure construction in various countries.

Besides the supercycle factor, a key factor of the HBA surge is China's import demand. "Domestic (Chinese) coal supply cannot meet the country's power plant needs," explained Agung.

Coal price has rebounded in the last four months after it had been depressed during 2020 due to the Covid-19 pandemic. In October 2020, the HBA was set at USD51 per tonne, November 2020 USD55.71 per tonne, December 2020 USD59.65 per tonne, and January USD75.84 per tonne. "Coal price has been heading towards its psychological level in the last four months," Agung concluded.

For the record, changes in the HBA are also influenced by derivative factors in supply and demand. The derivative factors in supply include season, mine technical issues, national policies of suppliers as well as technical issues of supply chain such as train, barge, and loading terminal matters.

The derivative factors in demand are affected by lower electricity needs due to less industrial activities, import policies, and competition with other energy commodities such as LNG, nuclear, and hydro.

The February HBA will be used to determine coal price at the delivery point on a Free-on-Board (FOB) the vessel basis. (IY)

Head of Bureau of Communication, Public Information Services, and Cooperation

Agung Pribadi (08112213555)

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