Sunday, July 22, 2012

Indonesia's coal production increased, prices fell even

Based Futures Trading Supervisory Board report, the price of coal continued to decline since late 2011 to early July 2012. Reference to the price of Indonesian coal power plant with 6322 calories per kilogram, has decreased, for example, in May 2012, the reference price reached 102.12 U.S. dollars, fell to 96.65 dollars in June, and again fell to 87.56 U.S. dollars on July.

Downward trend in coal prices occur, due to overproduction. Productions of coal in January-March 2012 have increased high, compared with same period last year. During the first three months of this year, coal production reached 102 million tones, higher than the same period last year by 90 million tons. Despite declining rates, employers are not cutting production ramped up even more. The rainy season also did not inhibit the production of coal.

The main drivers of this increase in coal production, is more and more countries are to build power plants with coal fuel. Some countries are increasing the demand for China, India, Pakistan, Thailand, and Sri Lanka. China and India consume most.
Indonesian coal exports to these countries respectively 60 million tons this year. As a result, increased demand for coal and domestic coal production is greatly increased.

The Estimated production end 2012, could reach 390 million-400 million tons. These estimates have calculated the mining company's production capability and market demand and price fluctuations due to global crisis. APBI is exceeding projections of coal production projections from the government. As an illustration, this year, the government projected production of approximately 332 million tons of coal. Indonesia's coal production increased, prices fell even