Jakarta – Coal prices strengthened at the start of the week. In trading on Tuesday (11/4/2023), the May contract coal price on the ICE Newcastle market closed at US$ 205 per ton. The price strengthened 0.86%.
In previous trading, Thursday (6/4/2023), coal prices fell by almost 3%. Coal trading was closed last Friday and last Monday to celebrate Good Friday and Easter.
Yesterday’s increase in coal prices was still supported by demand from the Asian region, including China.
Demand from China is projected to increase sharply this March in anticipation of rising demand for electricity during the summer.
China has had problems with electricity supply in the summer of the last two years due to heat waves.
The heat wave not only increased the demand for electricity for cooling but also reduced the production of hydroelectricity.
It was the bad experiences in 2021 and 2022 that made Beijing continue to increase the number of their coal plants despite the opposition of many countries.
China reports that they will increase their coal generation capacity by 50 giga watts (GW) by 2022.
However, this number is believed to have not been fully reported. The Global Energy Monitor (GEM) report shows that the capacity of coal power plants proposed to be built or in the construction phase initiated by China, both domestically and abroad, has penetrated 366 giga watts (GW).
This amount is equivalent to 63% of the total worldwide.
“As an emerging market country, China needs a fast-growing energy supply. It’s very difficult to expect that from wind or solar resources. China is also facing a power crisis in two years so they have no choice,” said Yang Muyi, an analyst at thinktank Asia Social Policy. Institute to China Dialogue.
Similar steps were also imitated by the Philippines and many other Asian countries, such as Vietnam and Cambodia.
The GEM report said the capacity of brick plants in the Philippines has even doubled in the last 10 years.
The rise in coal prices was also supported by soaring world gas and crude oil prices. Coal is an alternative energy source for gas and oil so that their prices influence each other.
European natural gas prices EU Dutch TTF (EUR) rose 1.31% a day to 43.69 euros per mega-watt hour (MWh) yesterday.
Meanwhile, the price of WTI crude oil rose 2.22% to US$ 81.51 per barrel and Brent oil rose 1.62% to US$ 85.54 per barrel.
