Coal associations see price to remain at current levels next year

By Godang Sitompul and Brigida Ernestina Elu Wea

The Indonesia Mining Association (IMA) and the Indonesia Coal Mining Association (ICMA) said that coal price next year will likely stay at current levels of between US$60-67 per ton.

IMA Chairman Ido Hutabarat said on Tuesday on the sidelines of the 4th Annual Coal Buyers and Producers Conference held by Petromindo.com that even if there?s an in increase in the price next year, it will not be significant as demand from markets such as India, South Korea, and Japan remain weak.

?My projection is that coal price will stay at current levels next year,? he said.

Hendra Sinadia, Director Executive of ICMA, shared the same opinion. ?Price (next year) will be stagnant (at current levels). There will be no significant increase,? he said.

Ido said that coal price has been on the rise in recent months, increasing by 20 percent over the past two months, to around $66 per ton for high CV coal, from $53 per ton at the start of this year, mainly driven by a policy in China to cut down production.

He said that at current price levels, domestic coal miners have enjoyed profits, sending some smaller miners to prepare to resume production activities after suspending them in the wake of the coal price plunge in recent years.

Hendra said that that the increase in coal price in the past two months has provided optimism for domestic coal miners.

In the future, he added, that the domestic coal market will be expanded as new coal-fired power plants currently being developed will be completed by 2019 or 2020. He pointed out that of the planned 35,000 MW power plants to be developed until 2019, about half will be coal-fired plants, which will boost demand for coal.

He projected that coal demand at home in 2020 will nearly double to around 170 million tons per year, compared to current level of around 90 million tons, or about 15 percent of installed production capacity. The higher demand for coal in the domestic market will eventually help increase coal price, he added.

Editing by Reiner Simanjuntak