Indonesia set its October coal benchmark price, the HBA, at a record high, as demand from Europe grows and buyers shift away from Russian suppliers. The HBA rose to $330.97 per mt, up from $319.22/mt in September, and breaking the previous record of $323.91/mt in June. Global supply shortages and growing energy security concerns, particularly in Europe, have created a rebound in coal demand. The 3.6% increase was in line with what other traders were charging for thermal coal and the biggest HBA increase since the beginning of 2022.

“In addition to the increase in the average index, European countries such as Germany, the Netherlands and Belgium have revived coal plants as a result of Russia’s gas cuts,” said Head of the Bureau of Communication, Public Information Services and Cooperation (KLIK) of the Ministry of Energy and Mineral Resources Agung Pribadi. “Another factor that influenced the increase in HBA was the constraint on the supply of natural gas in Europe. “There is a gas network leak that occurred in the Baltic Sea so that gas prices soared,” said Agung.

HBA is obtained from the average index of the 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/kg GAR, total moisture 8%, total sulfur 0.8% and ash 15%.