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Monday, 15 August 16
INDONESIAN COAL PRICES RALLYING; COAL OUTPUT REMAINS FLAT
Coal excavatorCOALspot.com: Global thermal coal prices, including Indonesian coal prices have risen sharply due to jump in imports from China as it curbs domestic output.

Indonesia coal prices are rallying along with the global coal prices since April 2016. The Asian benchmark thermal coal prices have climbed significantly since April and now at around $65 per ton. An Indonesian coal miner is expected,  the Asian benchmark prices may go up further and can reach at around $ 70 – 75 by the end of this year or early next year, however, the price rally depends on China’s moves.

Average 5000 GAR coal index of Indonesian origin rose 10.84% since 15 April 2016 to averaging $42.84 per ton this past week, showing the CS (i) Coal Index weekly closing figures.

The CS (i) Coal index is newly established an independent coal benchmark forecast for Indonesian particular coal types.  The CS (i) Coal indices are generated through a Technology aided system, based on COALspot’s own proprietary algorithm requiring minimal human involvement.  Therefore, these can be considered as a set of highly transparent  & realistic indices for the Indonesian coals of 5700, 5000, 4200 and 3800 GAR grades.

The current price rally purely because of China’s coal production policy. According to a miner, the China has decided to cut around 250 million tons of coal by the end of this year. So far or January to July 2016, the China has successfully cut around 90 million tons. The Indonesian domestic coal demands also slightly increase and the demand is expected to continue further in coming years.

Commenting on the coal price rally, a miner says that, the coal prices are expected to further strengthening coming months as China still maintains its production policy. Unless the China, one of the world’s largest coal producer and importer, alter its current restriction on coal production, the prices are expected to be high and it will continue to move upward.

Whether the Indonesian big scale coal miners are planning to increase output in the near future to enjoy the high coal prices?

It seems that the Indonesian coal producers were not planning to boost output to enjoy the recent coal price hikes at any time soon, as, according to them, the current price levels are not enough or it is not encouraging levels for them to review their coal output plan. They say, the Indonesian coal output in 2016 remains low compared to last year’s output.

Another miner also reflected the same view. “ We do not increase our output, the current price hike is not enough to cover long-term production cost”, he says when we ask whether there is any plan to review the coal production plan based on the current price levels.


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