Coalindo Energy launches ICI-5

Indonesian coal index (ICI) provider PT Coalindo Energy has launched on Thursday new coal index called ICI-5 to track the price of 3,400 Kcal/kg (GAR) coal in Indonesia.

ICI president commissioner Jeffrey Mulyono claimed the benchmark was the first in the world. ?For trades of coal of this grade, there had not been price benchmarks. This is the world?s first.?

?It?s therefore very possible the whole world would eventually refer to ICI-5 as the pricing standard because there is simply no other benchmark available,? said Jeffrey.

?The number of players or producers of coal of this grade is increasing. If there is no clear standard, the government cannot properly estimate state revenue, sellers do not know at which price they would sell, while buyers find it difficult to calculate costs,? Jeffrey said of the reason behind the ICI-5 launch.

Before ICI-5, ICI has introduced four price benchmarks for coal with four levels of calorie. They are ICI-1 (6,500 kcal/kg), ICI-2 (5,800 kcal/kg), ICI-3 (5,000 kcal/kg) and ICI-4 (4,200 kcal/kg).

ICI, is one of the four benchmarks the government uses to determine Indonesian coal price. The other three are Newcastle Price Index, Global Price Index and Platts.

?The government will then combine the four standards, with each carrying an equal weighting of 25%, because obviously every single one of them has its own pattern and method,? said Jeffrey.

The ICI-5 is formulated through a series of presentations and exchanges among producers, traders and users of coal. The minimum number of panelists is 20. The results are then compiled with data from Argus Media.

At present, according to Jeffrey, almost all output of coal with 3,400 kcal/kg grade is exported.

?China and India need this kind of coal to be blended. China actually produces low rank coal but it is being burned domestically so it does not enter international trade.? (giok)