South Korean utilities to import more coal from the United States
Tuesday, May 31 2011 - 10:39 AM WIB
South Korean utilities may import around 3.5 million tons of U.S coal this year, up from an estimated 2 million tons in 2010 as the price of Indonesia?s sub-bituminous coal have been increasingly competitive compared to the U.S. coal following a new rule on Indonesia coal sales prices, said Jason Jang, General Manager of Fuel Procurement at Korea East-West Power Co. Ltd.
?For South Korea, it?s all about prices. These days Indonesian sub-bituminous coal prices are moving in a much regulated way and it does not work well in South Korea,? said Jason on the sidelines of Coaltrans Asia conference.
?Indonesian coal prices are roughly competitive with the U.S. coal prices?so why not?.The U.S. capacity is huge and South Korean utilities will be happy to introduce more U.S. coal into Korean market,? he added.
Under a new coal and mining law introduced in 2009, Indonesia miners must use a monthly coal price benchmark set by the government as reference to set prices for exports and domestic coal sales, as well as to calculate royalties as the country wants to boost revenue from the mining sector.
The government?s coal price benchmark is based on an average of monthly prices from four coal indexes combined --the Indonesian Coal-price Index (ICI), the globalCOAL Newcastle index, Newcastle Export Index and Platts-1 index.
Despite increasing buying of the U.S. coal, Indonesia will remain key suppliers for South Korean utilities, accounting for 50 percent of the country?s total coal imports of around 77 million tones, said Jason. (Fitri)