PT Tambang Batubara Bukit Asam Tbk : Coal Prices in 2017 Predicted to Strong Enough

Entering the new year, 2017, Coal Price Reference (HBA) which released by the Ministry of Energy and Mineral Resources (ESDM) down 15.2 percent, from US$101.69 per ton in December 2016 to US$86.23 per ton in January 2017.

Deputy Executive Director of the Indonesian Coal Mining Association (ICMA) Sinadia Hendra said the decline in the HBA is already expected by market participants. Therefore, the downward trend in the commodity price index has seen since December 2016. However, this month HBA position is still much higher than the average price last year.

Hendra explained, along with the coal demand ahead of the winter at the end of last year, a major manufacturer of the world's coal began to increase production. However, continued Hendra, volume increased production still exceeds the increase in consumption.

'China as expected earlier start to raise back production, as well as India,' he said, as quoted by Bisnis Indonesia, Thursday (01/05/2017).

Head of Research at Capital Connection Alfred Nainggolan, as quoted by CNN Indonesia on January 3, predicts that during 2017 the price of coal will not be under US$80 per ton.

The price of coal ever touched its highest price in 2011 ago for US$144 per ton. After that, gradually weakening coal prices began to touch US$53 per ton at the beginning of 2016. At the end of the year, coal prices jumped up to US$101.69 per ton.

With this situation, the price of coal rated strong enough to be at the level of US$80-US$100 per ton. Some coal sales contract are usually renewed at the beginning of the year will follow the price range and automatic effect on financial performance in 2017.

Alfred Says, the surge in the price of coal in 2016 and has raised optimism of market participants on the performance of listed companies, especially coal mines.

'It's mean, in 2017 the financial statements of listed coal companies would rise significantly, the price of coal is very strong,' said Alfred.