Indonesia sets May HBA thermal coal price at $275.64/mt, down $12.76/mt on month

Indonesia's Ministry of Energy and Mineral Resources has set its May thermal coal reference price -- also called Harga Batubara Acuan, or HBA -- at $275.64/mt, down $12.76/mt from April, due to an increase in world coal supply.

China and India, the world's two biggest coal consumers, increased their domestic coal production to reduce imports.

"In addition to the increase in production, China's decision to reduce coal power plants and develop green energy has also contributed to the decline in world coal prices," Ministry of Energy and Mineral Resources Spokesperson Agung Pribadi said.

The decision by the United States and the North Atlantic Treaty Organization, or NATO, to embargo Russian energy supplies led to an increase in the reference coal price in April to $288.40/mt, the ministry said.

Indonesia's HBA continued to climb over January-April, starting at $158.5/mt in January, $188.38/mt in February and $203.69/mt in March. "Only this month the graph has dropped slightly," Pribadi said.

The HBA is a monthly average price based 25% on the 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).

The HBA price for thermal coal is the basis for determining 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.