Indonesia's Coal Reference Price Drops 16% at the End of 2023

The Indonesian Ministry of Energy and Mineral Resources (ESDM) has set the December 2023 benchmark coal price (HBA) at US$117.38 per ton. This price is down 16.03% from the November 2023 benchmark of US$139.80 per ton.

The December 2023 benchmark price marks the eighth decrease since the beginning of 2023. In January 2023, the benchmark coal price was set at US$305.21 per ton.

The sharpest price drop occurred in May 2023, reaching US$206.16 per ton, a 22.28% decline from April 2023's US$265.26 per ton.

Meanwhile, the HBA benchmark only increased four times throughout 2023. The highest increase occurred in November 2023, reaching US$139.80 per ton, a 12.77% rise from October 2023's US$123.96 per ton.

The details of the December 2023 HBA include HBA I at US$85.92 per ton, down from US$103.20 per ton in November 2023.

HBA II is set at US$57.70 per ton in December 2023, an increase from US$52.86 in November 2023.

HBA III is priced at US$34.18 per ton in December 2023, also up from US$28.49 in November 2023.

Previously, the HBA was determined based on the average of the Indonesia Coal Index (ICI), Newcastle Export Index (NEX), Globalcoal Newcastle Index (GCNC), and Platt's 5900, with quality standardized to a calorific value of 6,322 kcal/kg GAR, 8% total moisture, 0.8% total sulfur, and 15% ash.

The HBA is now calculated based on the average of the coal selling price realized in the previous month (70% proportion) and the price realized two months prior (30% proportion).

The HBA is also categorized into four grades based on coal quality:

* HBA: calorific value equivalent of 6,322 kcal/kg GAR, 12.26% total moisture, 0.66% total sulfur, and 7.94% ash.
* HBA I: calorific value equivalent of 5,300 kcal/kg GAR, 21.32% total moisture, 0.75% total sulfur, and 6.04% ash.
* HBA II: calorific value equivalent of 4,100 kcal/kg GAR, 35.73% total moisture, 0.23% total sulfur, and 3.90% ash.
* HBA III: calorific value equivalent of 3,400 kcal/kg GAR, 44.30% total moisture, 0.24% total sulfur, and 3.88% ash.

This benchmark price is set forth in Indonesian Minister of Energy and Mineral Resources Regulation No. 447.K/MB.01/MEM.B/2023 concerning the Reference Price for Metal Minerals and the Reference Price for Coal for December 2023, dated December 20, 2023.

(See also: Indonesian Coal Reference Price Strengthens 12.77% in November 2023)