Weaker World’s Demand due to Covid-19 Brings Down April 2020 HBA

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 146.Pers/04/SJI/2020

Date: 6 April 2020

Weaker World's Demand due to Covid-19 Brings Down April 2020 HBA

Lower electricity consumption in Covid-19 affected countries has led to less demand for coal in those countries, and subsequently a global oversupply of coal. This has caused a drop in the four coal price indexes commonly used in the world's coal trade, namely Indonesia Coal Index (ICI), Newcastle Export Index (NEX), Globalcoal Newcastle Index (GCNC), and Platt's 5900.

"The average monthly index of ICI is down by 2.66%, Platt's 2.75%, GCNC 1.77%, and NEX 0.66%. Because these four indexes were down, the Indonesian Coal Price Benchmark (HBA), which is affected by these indexes, is certainly down, too," said Head of Bureau of Communication, Public Information Services, and Cooperation of Ministry of EMR, Agung Pribadi, Monday (6/4).

Agung confirms that the drop in the coal price index has been triggered by, among others, less electricity demand in countries affected by the Covid-19 pandemic. "The policy on Work From Home in several countries has reduced the electricity consumption in capital cities and business centers, and eventually, lowered coal demand," continued Agung.

Agung says the HBA amount is obtained from the average value of four coal price indexes in the world, namely Indonesia Coal Index (ICI), Newcastle Export Index (NEX), Globalcoal Newcastle Index (GCNC), and Platt's 5900, of the previous month.

"Based on the calculation of the four indexes average, HBA is proposed at USD 65.77 per ton, or less USD 1.31 from the March HBA which was set at USD 67.08 per ton," Agung explained.

The HBA has been fluctuating. It was set at USD 66.30 per ton in December 2019, down to USD 65.93 per ton in January 2020, up to USD 66.89 in February 2020, to USD 67.08 in March 2020, and going down again in April 2020.

The April 2020 HBA will be used for direct (spot) sales for the whole month on a Free-on-Board (FOB) the vessel basis. (IY)

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

Agung Pribadi (08112213555)

Share This!