Jakarta, CNBC Indonesia – World commodity prices have risen so far this year and peaked in October. Some commodities managed to carve record highs of all time, but after that one by one began to fall.
Coal throughout 2021 scored a price spike of 171.67% and touched an all-time high on October 5. But after that, world coal prices fell by 46% to this day (2/11/2021).
Crude palm oil prices (crude palm oil/CPO) is in the same position as coal, which was under pressure after reaching a record high. Palm oil hit its highest price on October 20, further down 2.17% to date.
The soaring commodity prices this year were triggered by supply constraints. Covid-19 pandemic (Coronavirus Disease-2019) which struck in 2020 paralyzed mining operations. Although currently recovering, mining operations are still not able to reach their maximum point.
On the other hand, demand came quickly because the wheels of the economy in a number of countries began to move. The need for commodities as industrial raw materials and fuel soared in the midst of a still minimal supply. This will cause the commodity “boom” in 2021.
High commodity prices have two sides. For commodity producers like Indonesia, rising prices are a blessing. However, for consumer countries, this situation is a “catastrophe”.
High purchasing costs make commodities unable to be absorbed by the industry, resulting in sluggish manufacturing activity and even an energy crisis like what happened in China.
The Chinese government took price intervention steps by increasing the domestic supply of coal to cool down coal prices that continued to smolder. This is done so that the black gold can be absorbed by power plants and keep China away from the electricity crisis as it is currently happening.
As a result, the current price of Chinese thermal coal has fallen 52% since the highest price on October 19, 2021. Likewise, world coal prices are at the level of US$ 145/ton, down 46% from the highest price of US$ 269.5/ton. tons.
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