Indonesian coal miners reported higher average selling prices in the first quarter of 2018, supported by strong Chinese demand and weather-related supply disruptions.
Rains have been impacting production at various producing regions in Indonesia over the past few quarters. However, miners were hopeful that they will be able to achieve their output targets for the full year 2018.
Indonesian miner Adaro Energy said first-quarter production fell 8% year on year as rains impacted output, even as average selling price during the period jumped 14% driven by strong demand in China.
Adaro produced 10.95 million mt in the first quarter and said it was on track to achieve its full-year target of 54 million mt-56 million mt.
Sales volume for the first quarter fell 9% on the year to 10.93 million mt, the company said.
Although the company did not give details about the first-quarter average selling price, it said that Chinese demand was one of the primary factors driving prices higher.
"China's coal-fired power generation increased due to the harsh winter and gas shortage and created a tighter coal market in the country," Adaro said in its quarterly reported dated April 26.
"It is expected that after demand for heating declines and supply increases [in China], coal prices will moderate."
Indonesia accounted for 22% of Adaro's total sales, while Japan accounted for 15% and South Korea and China 12% each.
Adaro has several mines in South Kalimantan province and produces low ash, low sulfur coals with heating values ranging from 4,000 kcal/kg GAR to 5,000 kcal/kg GAR, according to its website.
The price of FOB Kalimantan 4,200 kcal/kg GAR coal, a grade popular with buyers in India and China, surged to a high of $51.50/mt in February this year, before losing some gains to be assessed Friday at $43.50/mt, S&P Global Platts data showed.
Adaro is also moving into power generation, with plans to build two 1,000 MW coal-fired plants in Central Java at an estimated cost of $4.2 billion in a joint venture with Japan's Electric Power Development Co. and Itochu Corp.
It is also planning to build two 100 MW plants in South Kalimantan that are expected to start commercial operations in the first half of 2019.
PTBA Q1 PRODUCTION HIGHER
Meanwhile, Indonesian coal miner PT Bukit Asam [PTBA] said first-quarter production jumped 18% on the year to 5.28 million mt, while sales volume rose 16% to 6.3 million mt.
In an undated presentation posted on its website, the company said it expected to produce 25.54 million mt in 2018, compared to 24.23 million mt in 2017.
Bukit Asam, which produces coal with heating value ranging from 4,500 to 7,400 kcal/kg GAR, said its 5,000 kcal/kg GAR coal accounted for about 71% of the total sales volume. The company said domestic Indonesian market accounted for about 45.6% of its total sales, while China accounted for 28.6% and India 10%.
The weighted average selling price for January-March 2018 stood at Indonesian Rupiah 892,243/mt ($64.22/mt), up nearly 10% year on year, the company said.
The 90-day price of FOB Kalimantan 5,000 GAR has surged to a high of $74/mt in February but has since dropped and was assessed Friday at $61.75/mt, Platts data showed.
The company operates coal mines in South Sumatra as well as East Kalimantan and has mineable resources of 3.33 billion mt.
Bukit Asam is in the process of constructing several power plants across Indonesia and is also developing a coal bed methane plant in South Sumatra. It also runs coal railway transport operations.