Jakarta, CNBC Indonesia – The benchmark coal commodity price moved in the red zone this week, after five consecutive weeks of strengthening.
Throughout this week, the benchmark coal price in the ICE Newcastle (Australia) market fell by 4.1% to the level of US$ 107.5/ton on a global basis. point-to-point.
Previously, coal prices had strengthened for five consecutive weeks. Sentiment commodity boom also made the price of coal touched its highest level in the last decade.
In the last 10 years, coal prices have decreased since June 2011 and touched bottom in April 2016. During the 2011-2016 period, the price of coal fell 50% more than US$ 112/ton to below US$ 50/ton.
After years of being under pressure, the price of coal finally rebound. In a short time of less than a year the price of the stone rose and broke the level of US$ 100/ton.
But it didn’t last long, the price of coal finally sank and touched bottom in May 2017. The price of this fossil fuel commodity shot up again and brought it above US$ 100/ton.
However, since September 2018, coal prices have tended to downtrend which was accompanied by monetary tightening in the US, the trade war between the US and China to various recession issues.
The worst conditions were experienced during the corona virus (Covid-19) pandemic. Restrictions on economic activity made the demand for various commodities, including coal, sink. The price also fell below US$ 50/ton.
But now the strengthening of coal prices cannot be separated from supply chain disruption factors. Tensions between China and Australia made Panda Country boycott coal imports from Kangaroo Country.
So far, China has relied heavily on coking coal supplies from Australia. However, because of the boycott, China is looking for other supplier countries even though they are expensive. Moreover, the condition of China’s domestic coal mining is facing obstacles, especially entering the rainy season (plum rain season).
Domestic demand that exceeds production capacity has made China’s domestic coal prices soar. The import relaxation policy except for Australia also made global coal prices also increase, including the Indonesian Coal Reference Price (HBA) in June which broke US$ 100/ton.
CNBC INDONESIA RESEARCH TEAM
(chd / chd)
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