Coal Prices Will Continue to Slip until Q3: Analyst
Jakarta. Coal prices have plummeted since last Friday, reaching only $222.5 per ton after previously peaking at $463.75 per ton in late 2022, but the price of the commodity is expected to rebound in the third or fourth quarter of 2023.
Central Capital Futures analyst Wahyu Tri Laksono said that prices did weaken in early 2023. But he predicted that coal prices would average at around $100-$350 per ton throughout the year, with a price consolidation at around $200.
“A rebound will likely happen in the third or fourth quarter of 2023 with a 'testing support' of $265,” Wahyu said.
If it passes that number, it means the price range is returning to the long consolidation level of 2010-2021 in the $440-$2,700 mark, according to Wahyu.
JP Morgan Securities attributed the current declining coal price to the lower natural gas spot price and rising storage level.
“Thus lowering the calorific coal price value (CV) or high-calorie,” JP Morgan Securities said over the weekend.
JP Morgan Securities said they were not too surprised with where coal price is going but still found it shocking with how much it dropped.
Meanwhile, the price of low-calorie coal in the Indonesian market is also going down due to limited import demand amidst the abundance of supply. The sharp decline in coal prices also affects coal miners in ASEAN, thus putting their income at risk.
Indonesia is expected to produce 695 million tons of coal in 2023, marking a 1 percent growth from the 687 million tons it produced last year. It is also 4 percent higher than the 2022 target of 663 million tons.
Indonesia also exported 494 million tons of coal in 2023, its record-high after the 459 million tons of coal exports in 2019. Export is projected to reach 500 million tons this year.