June HBA Soars to USD100.33 per Tonne

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 184.Pers/04/SJI/2021

Date: 2 June 2021

June HBA Soars to USD100.33 per Tonne

The Indonesian coal benchmark price (Harga Batubara Acuan, HBA) has soared to USD100.33 per tonne in June 2021, an increase of USD10.59 per tonne compared to the May 2021 price of USD89.74 per tonne. This is the highest HBA ever recorded since November 2018, which was at USD97.90 per tonne.

Head of Bureau of Communication, Public Information Service, and Cooperation of Indonesian Ministry of Energy and Mineral Resources (EMR), Agung Pribadi, said that the upward trend in coal prices in the last two months was mainly driven by surging demand from China due to the rainy season in the country as well as higher prices of local coal.

"The rise in (China's) demand for electricity generation exceeds its domestic coal supply capacity," Agung said in Jakarta on Thursday (2/6).

The extreme rainy season, continued Agung, also reduced China's coal supply capacity. "This factor has triggered global coal prices to soar," he said.

The HBA is calculated from the average of four world's coal price indexes, namely Indonesia Coal Index (ICI), Newcastle Export Index (NEX), Globalcoal Newcastle Index (GCNC), and Platt's 5900 in the previous month.

During 2021, the HBA is quite volatile. Opened at USD75.84 per tonne in January, the HBA increased in February to USD87.79 per tonne, then fell in March to USD84.47 per tonne. In the last two months, however, the HBA rose to USD86.68 per tonne in April and USD89.74 per tonne in May.

For the record, changes in the HBA are also caused by derived supply and demand factors. Derived supply factors include season, mining techniques, supplier countries' policies as well as supply chain technicalities such as trains, barges, and loading terminals.

Meanwhile, derived demand is influenced by lower electricity demand, which is connected with industries' conditions, import policies, and competition with other energy commodities, such as LNG, nuclear, and hydro.

The June HBA will be used to determine coal price on a basis of Free on Board the Vessel (FOB Vessel) during the month. (IY)

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

Agung Pribadi (08112213555)

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