Global Demands Push February HBA to USD188.38 per Tonne

MINISTRY OF ENERGY AND MINERAL RESOURCES

THE REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 63.Pers/04/SJI/2022

Date: 8 February 2022

Global Demands Push February HBA to USD188.38 per Tonne

The Indonesian Coal Benchmark Price (HBA) in February 2022 has raised by USD29.88 per tonne, hitting USD188.38, compared to last month's HBA of USD158.50 per tonne. One of the triggers for the rise is soaring global demands for coal.

"The rise in the February 2022 HBA has been caused by soaring global demands for coal commodities," said Head of Bureau of Communication, Public Information Services, and Cooperation of the Indonesian Ministry of Energy and Mineral Resources in Jakarta on Tuesday (8/2).

Another factor contributing to a higher HBA is disruption to natural gas supply in Europe. "Most of European countries have shifted to coal to meet the needs of their power plants," Agung added.

A higher HBA is also due to the Indonesian government's decision to ban export from January 1st, 2022, in a bid to meet domestic demands. On January 31, 2022, the government eased the ban for miners that have fulfilled the DMO rules.

For the record, the HBA refers to an average price of four indices, namely Indonesia Coal Index (ICI), Newcastle Export Index (NEX), Globalcoal Newcastle Index (GCNC), and Platt's 5900 of the previous month, with a quality made equivalent to 6,322 kcal per kg GAR, Total Moisture 8%, Total Sulfur 0.8%, and Ash 15%.

The HBA is used for direct (spot) trade of coal commodities for the whole month on a basis of Free-on-Board (FOB) the vessel.

There are two derivative factors influencing the HBA movement, namely supply and demand. The derivative factors of supply include season, mine technicalities, policies of the supplying countries, and supply chain technicalities such as train, barge, and loading terminal.

Meanwhile, the derivative factor of demand is a reduced demand for electricity due to industry condition, import policies, and competition with other energy commodities such LNG, nuclear, and hydro. (IY)

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

Agung Pribadi (08112213555)

Share This!