Russian-Ukraine Conflict Lifts March HBA to USD203.69 per Tonne

MINISTRY OF ENERGY AND MINERAL RESOURCES

THE REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 94.Pers/04/SJI/2022

Date: 7 March 2022

Russian-Ukraine Conflict Lifts March HBA to USD203.69 per Tonne

Further escalation of geopolitical conflict between Russia and Ukraine has pushed global coal commodity prices even higher. The Ministry of Energy and Mineral Resources (EMR) has set the Indonesian Coal Benchmark Price (HBA) for March 2022 at USD203.69 per tonne, or surging by USD15.31 per tonne from the February's HBA of USD188.38 per tonne.

"Geopolitical conflict and tension in Eastern Europe between Russia and Ukraine have led to uncertainty of gas supply," said Head of Bureau of Communication, Public Information Services, and Cooperation of the Ministry of EMR, Agung Pribadi in Jakarta on Monday (7/3).

Russia, continued Agung, is one of the world's largest gas producers, so the conflict has put constraints on gas supply in Europe. "European countries have even started to turn to coal as an energy source," explained Agung.

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 Free-on-Board (FOB) the vessel basis.

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)

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