Australia-China Trade War Escalates, April HBA Rises to USD86.68 per Ton

MINISTRY OF ENERGY AND MINERAL RESOURCES

PRESS RELEASE

NUMBER: 121.Pers/04/SJI/2021

Date: 5 April 2021

Australia-China Trade War Escalates, April HBA Rises to USD86.68 per Ton

A worsening of the Australia-China trade war has impacted on the price of a number of global commodities including coal, Head of Bureau of Communication, Public Information Services, and Cooperation of Indonesian Ministry of Energy and Mineral Resources (EMR) Agung Pribadi has said in Jakarta on Tuesday (6/4).

Agung went on to say the tension of the trade war has impacted positively on Indonesia's coal export to China. "This has triggered the rise in Indonesian Coal Benchmark Price (HBA) for April of USD2.19 per metric ton (mt) to USD86.68 compared to March," explained Agung.

Australia-China relations deteriorate when Canberra called for an international inquiry about the origin of the Corona virus pandemic in 2020. Beijing responded the call as part of provocation. "The unofficial ban on coal import from the Land Down Under has disturbed China's production and logistics," Agung stated.

Reduced export, continued Agung, has also been furthered by disruption of NCIG port in Newcastle, Australia. Most of the exports from Newcastle are shipped to long-term customers in East Asia such as China, Japan, and South Korea. Newcastle coal itself is high calorie, thermal coal to be used in power plants plus several coal types used to manufacture steel.

Other factors contributing to a rising April HBA include a stronger coal demand from Japan and a sentiment of lower supplies compared to coal demand in the global world.

Besides the supply and demand factor, the HBA value is calculated based on the average of four world's coal price indexes, namely Indonesia Coal Index (ICI), Newcastle Export Index (NEX), Globalcoal Newcastle Index (GCNC), and Platt's 5900 of the previous month.

For the record, the HBA has been fluctuating in 2021. The HBA opened at USD75.84 per metric ton (mt) in January, then rose to USD87.79 per mt in February before falling to USD84.49 per mt in March.

The April HBA will be used to determine coal price on a Free on Board the vessel (FOB Vessel) basis. (IY)

Head of Bureau of Communication, Public Information Services, and Cooperation

Agung Pribadi (08112213555)

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