Jakarta (Indonesia Window) – The Indonesian Ministry of Energy and Mineral Resources stated that the benchmark coal price in May 2022 was recorded at 275.64 U.S. dollars per ton, down 12.76 U.S. dollars per ton from the previous month.

The decline in price occurred due to an increase in world coal supply, the ministry’s spokesperson, Agung Pribadi, said in a written statement on Saturday (May 14).

"China and India have increased their domestic coal production to reduce imports," he added.

In addition to the increasing supply, China's decision to reduce steam power plants and develop green energy also contributed to the decline in coal prices.

From January to April 2022, the benchmark coal price chart continued to climb from 158.50 dollars per ton to 188.38 dollars, then rose to 203.69 dollars, and reached 288.40 dollars due to the decision of the United States and the NATO to ban energy supplies from Russia.

The benchmark price is obtained from the average index of Indonesia Coal Index (ICI), Newcastle Export Index (NEX), Globalcoal Newcastle Index (GCNC), and Platt's 5900 in the previous month with quality equivalent to 6,322 kcal calories per kilogram GAR, total 8 percent humidity, 0.8 percent total sulfur, and 15 percent ash.

In addition, the Indonesian government has also set a domestic benchmark coal price specifically for electricity at 70 dollars per ton, while that for cement and fertilizer industries is 90 dollars per ton.

"May's benchmark coal price will be used directly in the sale and purchase of coal commodities for one month at the point of sale for free on board," Agung said.

Reporting by Indonesia Window