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Indonesia’s Sept coal price at record low, miners say oversupply worsens

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Indonesia has set the coal benchmark price at the lowest level on record amid subdued demand from big buyers, while the country’s miners group said a global oversupply of coal was worsening.

The government set its coal benchmark price (HBA) at $49.42 per tonne, the Energy and Mineral Resources Ministry said on Tuesday, down from $50.34 per tonne last month.

September marked a sixth consecutive month of decline in the benchmark price, which is used in spot trading in Indonesia, the world’s top thermal coal exporter.

“COVID-19 has resulted in a 20% drop in coal imports by China and demand from India is yet to recover post-lockdown,” energy ministry spokesman Agus Pribadi said in the statement.

Indonesia is increasingly looking to diversify markets for its coal and is targeting Vietnam as potential growth market.

Coal miners everywhere are in “survival mode”, Hendra Sinadia, executive director of Indonesia Coal Miners Association (ICMA), said at a virtual seminar on Tuesday, as the global coal oversupply situation worsens.

A global demand correction due to the coronavirus pandemic is expected at around 100 million tonnes, Sinadia said, citing IHS Markit, while output levels of the world’s biggest suppliers are not coming down significantly.

“On the supply side, production in Indonesia, as well as other suppliers such as Russian and Australia, are running relatively normally,” he said.

ICMA estimated that Indonesia’s coal output in January-July was 323 million tonnes, or around 59% of the government’s 550 million tonnes target.

ICMA said in July their members would cut their 2020 production by 15%-20% of their targets, amid low prices.
Source: Reuters (Reporting by Bernadette Christina Munthe Writing by Fransiska Nangoy; Editing by Martin Petty)

Source : hellenicshippingnews.com

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