HBA coal reference price continues to decline

The government set its coal reference price (HBA) for August 2015 at US$59.14 per ton FOB, slightly lower than $59.16 per ton set in July, the lowest level since the reference price was introduced in 2009.

Director for Coal Management and Development at the Ministry of Energy and Mineral Resources Adhi Wibowo was quoted by Bisnis Indonesia as saying Saturday that the further decline in the HBA was a result of lingering oversupply situation.

The price correction is expected to continue going forward, he added, but may slightly recover at the latter part of this year as coal purchase contracts starts to become effective.

Coal reference price is based on coal with CV (GAR) of 6,322 kcal/kg. It is calculated based on the monthly average of four international coal indices: Indonesian coal index/ ICI 1, Platts-1, New Castle Export Index, and Newcastle Global Coal Index. (*)