Jakarta, CNBC Indonesia – Coal prices have continued to decline sharply in the last two weeks. In trading on the ICE market in Newcastle (Australia) yesterday (2/11/21), the price of this commodity was recorded at US$ 140.9/ton. This figure fell US$ 100/ton or almost half of the record peak price some time ago which had touched US$ 240/ton
“5-6 months ago no one predicted that the price of Newcastle coal would rise above US$ 240/ton. Even though it fell to US$ 150, it was still above US$ 100/ton or higher than last year’s average. US$ 60 – US$ 70 per ton,” said Head of Research Henan Puithrai Sekuritas Robertus Yanuar Hardy in Investime CNBC Indonesia, Tuesday (3/11/21).
When coal prices drop compared to last month, it doesn’t mean the problem is over. The current price is still higher when compared to normal times, even reaching 2x more. Therefore, even though the decline occurred, coal companies or issuers still received big money.
“If at the end of this year it is still above US$ 100/ton, it will still sustain earning or the income of each issuer,” said Robertus.
The decline in this commodity was due to the government of President Xi Jinping, which was eager to lower coal prices.
China really feels the impact of the surge in coal prices, which since the end of 2020 (year-to-date) has still posted an increase of 89.48 percent. Around 60% of power plants in the Bamboo Curtain country use coal as a primary energy source.
The high price and the depletion of supply have forced a number of regions in China to carry out rotating power cuts. This causes tremendous production disruptions.
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