Indonesia's March HBA thermal coal price falls 3.8% on month on sagging China demand

Singapore — Indonesia's Ministry of Energy and Mineral Resources has set its March thermal coal reference price -- also known as Harga Batubara Acuan, or HBA -- at $84.49/mt, down 3.8% month on month, but up 26% year on year, according to a ministry spokesperson March 5.

The ministry had set the HBA for February at $87.79/mt and March 2020 at $67.08/mt.

"After the Lunar New Year and towards the end of winter, electricity consumption in China's business centers fell," Agung Pribadi, the ministry's spokesperson, said.

Both India and China are also focused on boosting their own domestic production, which has also impacted demand for Indonesian thermal coal, Pribadi noted.

The HBA is a monthly average price based 25% each on Platts Kalimantan 5,900 kcal/kg GAR assessments, Argus-Indonesia Coal Index 1 (6,500 kcal/kg GAR), Newcastle Export Index (6,322 kcal/kg GAR) and globalCOAL Newcastle (6,000 kcal/kg NAR).

In February, the daily FOB Kalimantan 5,900 kcal/kg GAR coal assessment averaged $76.56/mt, down 14% from $88.82/mt in January, Platts data showed.

The HBA price for thermal coal is the basis for determining the prices of 77 Indonesian coal products and calculating the amount of royalty producers have to pay for each metric ton of coal sold. It is based on 6,322 kcal/kg GAR coal with 8% total moisture content, 15% ash as received and 0.8% sulfur as received.