Indonesia's Ministry of Energy and Mineral Resources has set its June thermal coal reference price, also known as Harga Batubara Acuan or HBA, at $52.98/t, down 13.3% from the price of $61.11/t in May.
The benchmark price dropped to its lowest since June 2016, mainly due to a stagnated global economy resulted from the pandemic.
"Weak economy, coupled with high domestic stockpiles, has reduced Chinese and Indian seaborne coal demand, the HBA price further slumps on the month." said a ministry spokesman.
The price set for June is 34.98% lower than the price set at $81.48/t in the corresponding month in 2019.
The HBA is a monthly average price based 25% each on Platts Kalimantan 5,900 kcal/kg GAR assessment, 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).
The HBA price for thermal coal is the basis for determining the prices of 77 Indonesian coal products and calculating the 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.
(Writing by Becky Du Editing by Tammy Yang)
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