Coal miners should provide price discount to increase sales
Tuesday, May 3 2022 - 03:47 PM WIB
Coal miners should provide more price discounts to help increase export volume to China after the country’s thermal coal import declined in the first two months not only because of the Indonesian export ban in January but also due to high price environment and increasing domestic coal output, PT Indeks Komoditas Indonesia (IKI) said in its latest Indonesia Coal Report (ICR).
“IKI thinks the Indonesian miners should provide more discounts to increase sales volume in the remaining months of 2022,” the report said.
The report said that while some analysts believe that China will bolster coal import from Russia due to lower price and privilege to use the Yuan in the transaction, IKI opines that it will be challenging for the Russian coal miners to boost export to China due to vessels ban made by Europe and vessel owners reluctance to serve Russian commodities, while the alternative land transportation will be difficult due to China’s tight Covid-19 protocols.
IKI said that this will make China turn to Indonesian coal.
After slowing down in the first two months of this year, IKI expects Japan to increase coal import in the second quarter to meet rising demand from the power plant sector ahead of the summer season.
But there’s a downside as a number of thermal power plants are said to undergo maintenance following an earthquake incident in March.
“IKI hopes Thailand will increase demand for imported coal in the second quarter of 2022 to support its industrial and business activities, while the incoming dry season will increase the residents' power consumption for air conditioning,” the report said.
IKI said that South Korea is also expected to increase coal import in the second quarter of 2022, especially for Indonesian coal, as cement producers reportedly are planning to increase production amid high demand from the construction sector.
It acknowledged, however, that such expectation may seem very optimistic as mild weather condition, low activity in the manufacturing sector, decreasing metal demand from the export market, and the Won depreciation against US dollar may cause Korea to slowdown coal import in April – June 2022.
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