Jakarta, CNBC Indonesia – Coal prices edged up on the first trading day of this week. In the last trade last week, Monday (17/4/2023), the coal price for the May contract on the ICE Newcastle market closed at US$ 183 per ton. The price edged up 1.1%.
Yesterday’s strengthening broke the negative trend of coal prices which had collapsed the previous three trading days.
The increase in coal prices was mainly fueled by positive sentiment from China and increased demand for summer from a number of countries.
The long Eid holiday factor in Indonesia also pushed up prices.
China’s manufacturing activity is expected to start to stretch. This condition is expected to boost coal demand.
The Chinese Customs Office reported that China’s coal imports in the first quarter of 2023 reached 101.8 million, up 96% over the same period.
During March alone, China’s coal imports reached 41.17 million tonnes, up 151%. This number is the highest since January 2020 or pre-pandemic.
The surge in imports was due to increased demand, particularly to Australia. After the import embargo was opened, Chinese businessmen have been busy buying coal from Australia.
The opening of borders and the easing of Covid-19 policies also increased demand.
Steel industry activity has also started to stretch. Shipments of steel ore in March jumped 14% to 94.17 million tons.
“Buyers of thermal coal in Asia are expected to increase their pre-summer orders in the coming days,” S&P wrote in its report. Market Movers Asia.
India is one of the countries that will soon face summer in the near future.
India has imported a large amount of coal in February 2023. India has imported 2.2 million tons of coal, up 25% (month to month/mtm) in February.
S&P also explained that Asian buyers would buy coal from Indonesia in anticipation of the long Eid holiday.
“Indonesia’s coal production may drop considerably in mid-April due to the end of Ramadan,” wrote S&P.
The Indonesian Eid holiday will take place on 19-25 April 2023.
Apart from limited mining activities, the long holiday will also affect transactions and loading and unloading at the port.
Indonesia is the largest exporter of thermal coal in the world so production developments in the country will affect world coal prices.
MODI data from the Ministry of Energy and Mineral Resources shows that coal production reached 196.3 million tons as of April 17, 2023.
CNBC INDONESIA RESEARCH
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