Jakarta, CNBC Indonesia – The price of Newcastle thermal coal has soared this week and passed the psychological level of US$ 200/ton, following the uncertainty surrounding world coal supply due to Indonesia’s tightening import policy.
On Friday (14/1/2022) the price of the most active coal futures contract in the New Castle market closed 2.48% higher to US$ 216.75/ton. That level was the highest since October 29, 2021, which at that time was at US$ 223.45/ton.
During the week, the energy price of the world’s electricity supplier did not even experience a correction, resulting in a weekly rally of 10.64% to the psychological 200 level. This rally continued last week which also strengthened, by 15.51%, to US$ 195.9/ tons.
The trigger for the surge in coal prices was none other than the policy of banning coal exports, which was announced recently, following the crisis in domestic supply due to the non-enactment of Domestic Market Obligations (DMO).
Although the Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Panjaitan announced easing, and corrected the stance announced by President Joko Widodo earlier, the world coal market still sees uncertainty because there is no sustainable solution regarding coal supply for power plants in Indonesia.
Indonesia is currently a major exporter of thermal coal in the world with an export volume of 400 million tons (2020), or equivalent to 40% of the export of coal for this type of power plant circulating in the global market-according to data from the International Energy Agency (IEA).
Even though Indonesia is in the fourth position in the world in terms of global coal production, it is currently the world’s largest coal producer net exporter largest thermal coal. The two largest coal producers, namely China and India, are currently net importers of thermal coal.
Australia as one of the world’s main coal producers followed Indonesia with exports of thermal coal of 213 million tons, while the United States (US) instead imported thermal coal from Indonesia of 600,000 tons (2020).
With the strategic position of the national coal, the ban on coal imports per January only according to projections CNBC Indonesia Research Team could cut 30 million coal supply in the world.
Not surprisingly, world coal prices skyrocketed following the news of Indonesia’s export ban. The price of coal on the Newcastle (Australia) ICE market increased by almost US$ 50 per ton during the year, or 27.8%.
CNBC INDONESIA RESEARCH TEAM
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