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Indonesian coal price hits nearly three-year high
The government says that surging demand for coal in China, where bad weather has limited local production while industrial recovery is driving up demand, is responsible for the price hike in Indonesia.
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Backhoes operate at the Binungan open-pit coal mine belonging to PT Berau Coal in East Kalimantan, in this 2020 file photo. (JP/Indra Harsaputra) (JP/Indra Harsaputra )
Indonesia’s benchmark coal price (HBA) hit US$100.33 per ton in June, the highest since November 2018, driven mainly by soaring Chinese demand.
The Energy and Mineral Resources Ministry, which issues the monthly HBA, said on Wednesday that the demand surge in China was due to a combination of ongoing industrial recovery and limited domestic production during the rainy season in that country.
China’s gross domestic product (GDP) grew 18.3 percent in the first quarter of the year to mark the strongest quarterly growth rate since 1992, driven by recovering industrial activity, retail sales and investments.
“The rising power demand in China is exceeding the capacity of [its] domestic coal production,” ministry spokesman Agung Pribadi said in a statement on Wednesday.
The HBA, which stood at $89.74 per ton in May, has been gradually rising since it fell to a record low of $49.42 per ton in September 2020 as economies reopen and increase the demand for electricity.
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