HBA predicted to hit $100/ton this year

By Adianto P. Simamora

The government?s coal reference price (HBA) is predicted to hit US$100 per ton at the end of this year as coal demand is expected to increase at the time when coal production is on a declining mode.

?The coal price keeps going up now. We predict the HBA price will be in the same trend with last year hitting US$100 per ton in December,? Adi Suharto, head of facilitation of dispute and labor at the directorate of coal development told a gathering.

Adi spoke on behalf of Director of Coal Development at gathering organized by IHS Markit and International Mining Media in Jakarta on August 15th.

The HBA reached US$83.97 per ton in August, higher than $78.95 per ton set in July 2017.

In December 2016, the HBA was set at US$101.69 per ton FOB, the highest in that year.

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.

Scott Dendy, Director of Coal at IHS Markit said that Indonesia production has been limited so far this year due to the prolonged wet weather and is then unlikely for the country to meet the targeted annual production.

?This has had a supportive impact on (coal) price....? he said.

Editing by Reiner Simanjuntak