Thermal coal prices have risen above $US200 ($278) per tonne for the first time since November, owing to Indonesia’s export ban while it manages domestic supply issues.
Newcastle coal futures opened 2022 with a decline of 7 per cent on the previous trading day, losing almost all of December’s gains to begin the year at $157.5 per tonne.
In the days since, however, the effects of Indonesia’s coal export ban have seen the coal price skyrocket to $203 per tonne as of January 10.
On January 1, Indonesia announced a one-month ban on international coal sales with the intention of shoring up its own domestic power plants while coal supplies fell stagnant.
As Indonesia remains the world’s largest exporter of thermal coal, this shook the Asia-Pacific region into action and several countries including India, China, Japan, South Korea, and the Philippines were quick to call for the ban to be lifted.
Promisingly for these countries, Indonesia has now released 14 coal-bearing vessels after confirming its state power utility PLN had started seeing better supply conditions.
It’s understood that Indonesian Coordinating Minister of Maritime and Investment Affairs Luhut Pandjaitan and the wider government will review the ban and its effects this week to reconsider lifting it earlier than first planned.
In November, KPMG released its quarterly coal price and FX market forecast. This was the first release since the start of 2020 to predict a decline in coal prices.
The report was released soon after the United Nations’ COP26 Climate Summit in Glasgow, Scotland, which saw more than 50 countries and organisations sign a joint statement agreeing to transition from coal power to clean power.