Jakarta. Coal Price remain solid in the middle of the threat from coal production increase in China. The effect production hike is only temporary. In the meantime energy commodity prices indicate positive trend in medium term.
As quoted from Bloomberg, on last Friday (4/11/16), coal prices for December 2016 contract on ICE Futures Europe rose 3.6% compared to previous day to US$ 10.675 per ton. In recent week, coal prices rose by 8.2%.
Previously, price coal has reached US$ 110.4 per ton on Tuesday (November 1st).
Wahyu Tri Wibowo, analyst of Central Capital Future explained that China realized that their previous policy to restrain coal production gave bigger impact than expected.
“Due to this, China began to intervene” said Wahyu. In reality, Coal supply in five main harbors in Bohai Rim region, China, increased 47.5% from previous week to 15 million ton.
Stock reserve for electric power plan also increased 34.5% to 65 million ton. Even though stock suffices, coal price keep rising. National Development and Reform of China (NDRC) concluded that coal price did not reflect the fundamental condition.
Chine gathered coal producer to stop price hike. With incoming winter, China worried that coal supply would not be sufficient. Price hike could also cause another problem, such as inflation.
Electricity bill for household and factory would also increase, following coal price increase. “China’s intervention will affect coal price in the short term” said Wahyu.
Until first quarter of 2017, Wahyu predicted that coal price would be around US$70 to US$132. Pressure would appear when the coal price reached US$110.
Indonesian’s Demand
Deddy Yusuf Siregar, an analyst from Asia Trade point Futures, explained that high demand of coal in China and other Asian countries still sustained the coal price. Furthermore, Coal reserve of Indonesia, as the largest exporter, start depleted.
According to Geology Division of Ministry of Energy and Natural Resource (ESDM), Indonesian Coal Reserve remained 161 million ton, with available reserve of 28 million ton. Whereas, the demand of coal for electricity was predicted to reach 63% of total energy resource in 2020, or increased 47% from today’s demand.
“If Indonesia increase coal consumption, it is feared that it will disturb global coal supply”, explained Deddy.
Deddy estimated that if coal price reached USR110, coal price had potential to be corrected to US$90 – US$110 at the end of this year. From technical point of view, Deddy saw that coal price would move above moving average (MA) 50, MA100 and MA200. MCAD indicator would be in negative area. Stochastic had tendency to strengthen at level 76 and RSI rise to level 67.
Deddy predicted that coal price would strengthened and move around US$101 – US$ 109.8 today and around US$100.1 – US$109.8 per ton within next week. Meanwhile, according to Wahyu, price would weaken and move around US$98-US$107 today, and US$95 – US$112 within next week.