PTBA officially trades on JFX in coal trading

JAKARTA. The Jakarta Futures Exchange (JFX) is aiming to provide an alternative reference for the price of coal, especially for the Indonesian market, with the launch of a physical coal online trading system on Tuesday.

The JFX is now trading coal contracts for the first time, after ups and downs in trading some of Indonesia’s key commodities, such as crude palm oil and coffee.

State-owned coal miner PT Bukit Asam, which is also listed on the Indonesian Stock Exchange (IDX), has become the first coal miner to trade its output on the JFX.

JFX president director Sherman R. Krishna said on Tuesday that Indonesia still did not have a coal price reference for coal deliveries with a period of more than one month, adding that he hoped the online trading system could fill the gap.

Indonesia only has coal price references for direct shipments and coal deliveries with a period of less than a month. The references are the Indonesian Coal Index, which is issued by Coalindo Energy, as well as the Indonesian coal price reference (HBA) and the benchmark price of coal (HPB), both of which are issued by the government, according to Sherman.

“The system is expected to give a more accurate price for coal trade contracts with a delivery period of more than one month because the contracts will be based on the price reference for a certain period,” he said during the launch event, citing the commodity’s price movements.

He added that the online system was expected to give easier access to foreign buyers and create a more transparent and fair coal trade.

In addition to Bukit Asam, the JFX would also explore the possibility of getting other coal miners, such as PT Adaro Energy and PT Arutmin Indonesia, listed on the market in the future, Sherman said.

Bukit Asam president director Milawarma said such a transparent trade system was needed to boost investors’ trust in the company.

“Investors and shareholders can see what the coal price is and the amount of the traded coal clearly,” he said.

Despite its participation in the market, Bukit Asam would not sell much through the online system this year due to its established commitments with buyers, he said.

Milawarma added that the company would only sell its output on the JFX if there was any oversupply.

For initial trade, Bukit Asam only offered 75,000 tons of coal, including 60,000 tons of coal with calorific value of 7,000 kilocalories per kilogram (kcal/kg) that is scheduled for shipment through Tarahan port in Lampung, and 15,000 tons of coal with calorific value of 6,300 kcal/kg that is scheduled for shipment through Kertapati Port in South Sumatra.

Seventeen bidders have already been registered on the JFX for the August auction. The bidders hail from the United Arab Emirates, Taiwan, Japan, Singapore, Malaysia and Indonesia, according to Milawarma.

He said the company would start exporting half of the company’s output through the JFX next year.

The company, he said, produced around 20 million tons of coal per year and was aiming to raise the figure to 25 million tons next year.

Futures Exchange Supervisory Board (Bappebti) head Sutriono Edi said that the online system could help the government to carry out its functions as a supervisor in the mining sector, and would recommend that other coal miners that held coal mining business permits (PKP2B) and commercial
mining permits (IUP) join the system. (ask)