Bambang Gatot Ariyono, Director General of Coal and Mineral Mining at Indonesia's Energy and Mineral Resources Ministry, said the rising benchmark coal price of Indonesia is largely due to policies of the Chinese government. Miners in China now produce less coal and therefore the nation's second-largest economy needs more coal imports, hence supporting international coal prices.

Moreover, coal demand in Southeast Asia has increased as well, particularly from Malaysia.

The HBA price, set by Indonesia's Energy and Mineral Resources Ministry each month, is based on (1) the Platts Kalimantan (5,900 kcal/kg GAR assessment), (2) the Argus-Indonesia Coal Index 1 (6,500 kcal/kg GAR), (3) the Newcastle Export Index - formerly the Barlow-Jonker index (6,322 kcal/kg GAR) - and (4) the globalCOAL Newcastle (6,000 kcal/kg NAR) index.

Hendra Sinadia, Deputy Executive Director of the Indonesian Coal Mining Association (APBI), said the Newcastle index - one of the components within the HBA - rose significantly over the past month as there emerged some concern about Australian coal supplies due to strike actions. Sinadia added that the HBA price - currently at +USD $80 per ton levels - is already much better than initially assumed by APBI. The institution earlier believed the coal price would be around USD $75 per ton in 2017. Although there are various external factors that affect the coal price, Sinadia hopes the price will remain stable in the remainder of the year.

Indonesian Government's Benchmark Thermal Coal Price (HBA):

Month  2012  2013  2014  2015
 2016  2017
January 109.29  87.55  81.90  63.84  53.20  86.23
February 111.58  88.35  80.44  62.92  50.92  83.32
March 112.87  90.09  77.01  67.76  51.62  81.90
April 105.61  88.56  74.81  64.48  52.32  82.51
May 102.12  85.33  73.60  61.08  51.20  83.81
June  96.65  84.87  73.64  59.59  51.87  75.46
July  87.56  81.69  72.45  59.16  53.00  78.95
August  84.65  76.70  70.29  59.14  58.37  83.97
September  86.21  76.89  69.69  58.21  63.93
October  86.04  76.61  67.26  57.39  69.07
November  81.44  78.13  65.70  54.43  84.89
December  81.75  80.31  69.23  53.51 101.69

in USD/ton
Source: Ministry of Energy and Mineral Resources

Indonesian Production, Export, Consumption & Price of Coal:

  2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Production
(in mln tons)
 217  240  254  275  353  412  474  458  461  434
Export
(in mln tons)
 163  191  198  210  287  345  402  382  366  343
Domestic
(in mln tons)
  61   49   56   65   66   67   72   76   87   91
Price (HBA)
(in USD/ton)
  n.a   n.a  70.7  91.7 118.4  95.5  82.9  72.6  60.1  61.8

Sources: Indonesian Coal Mining Association (APBI) & Ministry of Energy and Mineral Resources

Bahas