The Reference Coal Price (HBA) in February 2023 was recorded to have decreased by USD 28.16 per ton to USD 277.05 per ton compared to the HBA in January 2023. This was revealed by the Head of the Communications, Public Information Services and Cooperation Bureau of the Ministry of Energy and Mineral Resources (ESDM) Agung Pribadi.
Drop in HBA due to Warm Weather in Europe
The decline in the HBA was influenced by the start of warmer weather on the European continent. This causes coal demand from Europe to decline. Agung explained that, “The decline in coal prices was due to the decreased demand for coal from Europe due to the weather in Europe starting to warm up,”.
Impact of European Gas Supply on HBA
Apart from the weather, European gas supply conditions also play a role in determining HBA price fluctuations. “The weakening of natural gas prices also had an impact on coal prices to USD 277.05, so that all indices that affect the HBA fell,” said Agung.
At the beginning of this year, the disruption of coal distribution in Australia was one of the factors that triggered an increase in the HBA in January 2023 to USD305.21. Australia is one of the global coal suppliers.
Factors Affecting HBA
There are two derived factors that influence the movement of the HBA, namely, supply and demand. In terms of supply derivatives, it is influenced by season (weather), mining techniques, supplier country policies, to technical supply chains such as trains, barges, and loading terminals.
Meanwhile, the demand derivative factor is influenced by the decreasing need for electricity, which is correlated with industrial conditions, import policies, and competition with other energy commodities, such as LNG, nuclear, and hydro.
Explanation of Reference Coal Prices
HBA itself is a price obtained from the average of the Indonesia Coal Index (ICI), Newcastle Export Index (NEX), Globalcoal Newcastle Index (GCNC), and Platt’s 5900 in the previous month, with quality equivalent to calories 6322 kcal/kg GAR , 8% Total Moisture, 0.8% Total Sulfur, and 15% Ash.
HBA is used in the sale and purchase of coal commodities (spot) for one month at the point of delivery of sales on a Free on Board basis on the transport ship (FOB Veseel).