Economic recovery in China will increase demand for coals. In 2021, it is estimated that there will be a coal stock deficit in China, where the demand is greater than the supply of coal.
The Indonesian Coal Mining Association (APBI) is optimistic that this year’s coal demand is better than last year. APBI Executive Director Hendra Sinadia said that the potential for increasing demand for Indonesian coal is also boosted by the cooperation agreement between the Indonesian Coal Mining Association (APBI-ICMA) and CCTDA (China Coal Transportation and Distribution). In this cooperation, Chinese coal importers have agreed to purchase 200 million tonnes of Indonesian coal in 2021 with an agreement value of US $ 1.46 billion or equivalent to IDR 20.6 trillion.
However, this potential will depend on the Chinese government’s coal import quota policy.
Bloomberg data shows that a number of coal stocks performed well on Tuesday (January 5, 2021).
Coal’s benchmark price for January was US$75.84 per ton (S$100.60)—the highest since July 2019.
The price was up 27.14 per cent from that in December last year at US$59.65 per ton (S$79.09).
Several cities in China have restricted the use of electricity due to a shortage of coal supplies. In addition, Australia’s decision to limit coal imports has contributed to higher coal prices.
China imports coal from Australia. However, the two are embroiled in a trade war sparked by Canberra’s ban on Huawei and exacerbated by Australia’s calls to investigate the origins of COVID-19.
However, Hendra noted, Indonesia could not replace Australia as the main supplier of coal to China, because Australia was a producer of high-calorie coal.
The Indonesian government requires coal miners to sell 25 percent of their production for domestic needs, as stipulated in a decree by the Ministry of Energy and Mineral Resources.
