The Price of Coal Falls Down!

Jakarta, CNBC Indonesia – Coal prices plunged last week. It’s been two weeks in a row that the price of the black stone has fallen drastically.

Last weekend, the price of coal on the ICE Newcastle (Australia) market was recorded at US$ 154.9/ton. A plunge of 10.12% from the previous day.

On a weekly basis, the price of this commodity fell 18.9%. A week earlier, prices fell 20.86%.

Developments in China made coal prices fall. The government of President Xi Jinping is indeed eager to lower coal prices.

China has really felt the impact of the surge in coal prices, which since the end of 2020 (year-to-date) still posted an increase of 89.48%. Around 60% of power plants in the Bamboo Curtain country use coal as a primary energy source.

The high price and the depletion of supply have forced a number of regions in China to carry out rotating power cuts. This causes tremendous production disruptions.

China’s National Development and Reform Commission (NDRC) emphasized that the price of this commodity could still fall again after investing in producers. “The results of the initial investigation show that the cost of producing coal is still much lower than the price in the spot market,” the NDRC said in a written statement, without specifying the factors behind the statement.

Not only conducting investigations, China’s efforts to suppress coal prices are also carried out by increasing supply. The NDRC said China’s coal stock at the end of October 2021 rose by more than 100 million tons. Of these, about 12.5 million tonnes are already at power plants in northeastern China, which has entered the start of winter.

“Looking at the conditions of transportation on the railway and ports, the national coal stock will continue to grow,” continued the written statement from the NDRC.

Developments in China seem to make market participants hesitate. Can the price of coal still be pushed up? With China’s seriousness in suppressing, it seems like it’s a bit difficult, huh…

Therefore, coal contracts are exposed to mass selling (sell-off). So it’s no wonder the price has dropped drastically.


(aji / aji)