Coal Prices Hit US$150/Ton, Indonesian Businessmen React

Coal prices reaching the level of US$150 per tonne have become a point of concern amidst logistical disruptions caused by falling water levels in several rivers in Kalimantan. The Indonesian Coal Mining Association (APBI) maintains that the rise in coal prices is not solely influenced by Indonesia’s logistical conditions.

APBI Executive Director Gita Mahyarani stated that coal price movements are influenced by various factors, primarily the dynamics of global supply and demand. “Regarding coal prices, movements are influenced by various factors, especially global supply and demand dynamics,” Gita told CNBC Indonesia.

She noted that while coal logistics in Indonesia can indeed be a factor affecting market sentiment, the disruption in coal transportation due to declining river water levels is not the only determining factor for the price increase.

On the other hand, drought and falling water levels in several major rivers in Kalimantan have begun to disrupt coal transportation activities. This condition prevents barges from operating optimally, potentially leading to coal stockpiles accumulating at both mining sites and port stockpiles.

According to Gita, in several areas, increasingly shallow river conditions are limiting the draft of barges. As a result, the amount of coal cargo that can be transported in a single trip cannot be maximised.

“In several other river areas, the drop in water levels can also limit barge drafts, meaning the cargo cannot be maximised,” she added.