Global Coal Price Hits Record High of US$215

The Ministry of Energy and Mineral Resources (ESDM) set the Indonesian Coal Reference Price (HBA) for November 2021 at US$215.01. This is a record high, exceeding US$200 per ton for the first time since records began in 2009.

The November 2021 HBA surged 33% compared to the October 2021 HBA of US$161.63 per ton. Since the beginning of the year, the HBA has skyrocketed by 183.5% from the January HBA of US$75.84 per ton.

This increase is driven by the onset of winter and the coal crisis in China, impacting global coal prices. Other commodity factors, such as rising natural gas prices, also influenced global coal prices. This increase in basic commodity prices is a result of the global economic recovery following the Covid-19 pandemic.

The HBA has shown a drastic increase since the beginning of the year. Opening at US$75.84 per ton in January 2021, the HBA rose to US$87.79 per ton in February. After a slight dip to US$84.47 per ton in March, the HBA continued its upward trend until November.

The HBA is derived from the average of the Indonesia Coal Index (ICI), Newcastle Export Index (NEX), Globalcoal Newcastle Index (GCNC), and Platt's 5900 from the previous month. The quality is standardized at 6322 kcal/kg GAR, 8% Total Moisture, 0.8% Total Sulphur, and 15% Ash.

Two derivative factors influence HBA movements: supply and demand. Supply factors are influenced by weather, mining techniques, policies of supplier countries, and supply chain logistics such as trains, barges, and loading terminals.

Demand factors are influenced by electricity needs, which correlate with industrial conditions, import policies, and competition with other energy commodities such as LNG, nuclear, and hydro.