Indonesia has edged lower the coal reference price known as coal benchmark reference price for September as demands remain weak during the novel coronavirus pandemic.
The Indonesian Energy and Mineral Resources Ministry brought down the coal reference price for September by 0.92 percent to 49.42 U.S. dollars for one metric ton on a monthly basis, the ministry's spokesman Agung Pribadi said on Tuesday.
The subdued global and domestic demands occurred as business activities have not fully recovered, particularly those in the major importing countries, during the virus pandemic, the spokesman said.
The tightening of policies on coal imports applied by the importing nations has made the coal stockpiles surge in the nations, Pribadi added.
"The COVID-19 pandemic has led to a decline in coal imports by foreign nations," he said.
The Indonesian coal reference price has dropped since March, when the country confirmed its first COVID-19 cases, after creeping up in the presiding month.
To increase the tumbling coal prices, the Indonesian coal producers plan to slash 115 million tons of the country's coal outputs to 480 million tons this year, Head of the Indonesian Coal Mining Association Pandu Patria Sjahrir has said.
Last year, Indonesia's coal reference price drifted lower to an average of 77.92 U.S. dollars per one metric ton, falling from 98.96 U.S. dollars per one metric ton in the previous year, according to the ministry.
The Indonesian reference price for thermal coal is the basis for setting up the prices of the country's 77 coal products and measuring the royalty producers have to pay for each metric ton of coal sold.
The natural resources-rich Indonesia is one of the world's largest exporters and producers of thermal coal.
Editor:Cherie
