Indonesia's Ministry of Energy and Mineral Resources set its January thermal coal reference price, also known as Harga Batubara Acuan or HBA, at $86.23/mt, falling 15.2% from December and recording its first drop in seven months.
The ministry had set the December 2016 HBA price at $101.69/mt, the highest level seen since May 2012.
Since May 2016, the HBA had seen continuous month-on-month increases as thermal coal prices rose amid supply tightness and strong Chinese demand for seaborne cargoes.
The January HBA, however, represents a jump of 62% compared with the same month a year ago.
The HBA is a monthly average price based 25% on the Platts Kalimantan 5,900 kcal/kg GAR assessment; 25% on the Argus-Indonesia Coal Index 1 (6,500 kcal/kg GAR); 25% on the Newcastle Export Index -- formerly the Barlow-Jonker index (6,322 kcal/kg GAR) of Energy Publishing -- and 25% on the globalCOAL Newcastle (6,000 kcal/kg NAR) index.
In December, the daily Platts FOB Kalimantan 5,900 kcal/kg GAR coal assessment averaged $75.94/mt, down from $89.58/mt in November, while the daily 90-day Platts Newcastle FOB price for coal with a calorific value of 6,300 kcal/kg GAR averaged $86.31/mt, down from $101.01/mt in November.
The HBA price for thermal coal is the basis for determining the prices of 75 Indonesian coal products and calculating the royalty producers have to pay for each metric ton of coal they sell.
It is based on 6,322 kcal/kg GAR coal, with 8% total moisture content, 15% ash as received and 0.8% sulfur as received.
