Jakarta (Indonesia Window) – Indonesia’s referral coal price in April 2021 rose to 86.68 U.S. dollars per ton following the increasing tension of trade war between Australia and China which also affected a number of global commodity prices, Ministry of Energy and Mineral Resources spokesperson Agung Pribadi said here on Tuesday.
He added, the trade tension had a positive impact as it increased China’s demand for Indonesian coal.
“The referral price in April rose by 2.19 dollars per ton from last March to 86.68 dollars,” he noted.
The worsening relations between Australia and China sparked when Canberra in April 2020 called for an international investigation into the origins of the coronavirus pandemic.
Meanwhile, Beijing considered the investigation as part of a provocation.
“The unofficial ban on coal import from Australia has disrupted Chinese production and logistics,” Agung said.
The reduction in Australian exports to China, he continued, was also due to the disruption of the NCIG (Newcastle Coal Infrastructure Group) port in Newcastle.
Moreover, most of Newcastle’s exports are aimed at long-term customers in East Asia, such as China, Japan and South Korea.
The coal which was shipped from Newcastle has high calorie thermal and is used for power plants.
Another factor that caused the increase in April’s benchmark coal price was the increasing demand for coal from Japan and sentiment related to the decline in supply compared to global coal demand.
Indonesia’s referral coal price is obtained from the average of previous four world coal price indexes, namely, the Indonesia Coal Index (ICI), Newcastle Export Index (NEX), Globalcoal Newcastle Index (GCNC), and Platt’s 5900.
Indonesia’s benchmark coal price has been quite volatile since 2021, opening at 75.84 dollars per ton in January, then rising in February to 87.79 dollars per ton, then decreasing to 84.49 dollars per ton in March.
April’s referral coal price will be used to determine the coal price at the point of delivery by Free on Board (FOB Vessel).
Reporting by Indonesia Window