Jakarta, - Coal prices in the second semester of 2024 are determined by two things, the first is demand from China and the second is cutting global benchmark interest rates. Both of these are considered to increase demand for these energy commodities.
President Commissioner of HFX International Futures, Sutopo Widodo, said, coal prices in the future will depend on demand, and China's economic growth. This is in line with China's progress in achieving its climate goals and complying with stricter international carbon standards.
In May, China's share of coal-fired power generation hit a record low of 53%, down from 60% a year earlier, as renewable energy sources hit new highs.
In addition, China did not approve any coal-based steelmaking projects in the first half of this year, which was the first time China announced a major goal of climate neutrality by 2020.
In contrast, coal-fired power generation in the US is projected to increase this year and in 2025 compared to 2023 due to high natural gas prices. High natural gas prices mean countries will burn more coal for power generation during the coming winter.
In addition, Sutopo continued, the impact of interest rate cuts may bring better coal prices, due to the decline in the US dollar exchange rate. As the US dollar strengthens, it will make the cost to buy more, and as a result, coal demand may weaken.
“The dynamics of growth and demand as well as weather factors as an annual cycle will probably bring better coal prices,” Sutopo told Kontan.co.id, Tuesday (7/16).
Sutopo estimates that coal prices may be traded in the range of an average price of US$ 135 per metric ton, with US$ 140 as the peak price and US$ 130 per ton as the lowest price.
As for the first semester of 2024, coal prices are considered depressed due to weak global growth, accompanied by oversupply, which makes coal prices less attractive.
Contacted separately, Commodity and Currency Observer Lukman Leong said, coal prices in the first half of this year were depressed by the prospect of Fed interest rates, a slowdown in the global economy, especially China and oversupply.
However, in the second semester, although conditions are still oversupply, the hope of increasing prospects for interest rate cuts by the Fed can support prices. But it is necessary to be aware that coal prices will be affected by China's disappointing GDP data.
“Coal prices are expected to range from US$ 125 per ton - US$ 140 per ton,” Lukman added to Kontan.co.id, Tuesday (16/7).
Quoting Barchart, the price of Newcastle coal futures for the July contract was observed to have strengthened 0.82% to US$ 134.95 per ton on Monday (15/7).
Sources : investasi.kontan.co.id Jul 16.24