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13 December 2024

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Coal Weekly (06 – 12 December 2024): Avg. USD 132.9/ton (-1.6% WoW)

Recent Catalysts Driving the Price

  • In the last five trading days, average coal prices declined to USD 132.9/ton (-1.6% WoW). Despite China’s stimulus efforts, the decline persisted as India’s robust domestic coal supply reduced reliance on imports.
  • Furthermore, thermal coal prices plunged to their lowest levels in almost 3 months, with China’s strong coal imports in November (55.0 Mt; +18.9% MoM, +26.4% YoY) curbing demand for domestic supplies. The drop was further exacerbated by weak local consumption and China’s ongoing transition from thermal coal to renewable energy, highlighted by the construction of 1 GW offshore solar power plant in Dongying, Shandong Province.
  • In light of global economic uncertainties and potentially easing geopolitical tensions next year under Trump, we maintain our FY24 coal price forecast at USD 136/ton (YTD: USD 136.9/ton), and USD 125/ton in 2025. On the stock front, ADRO (TP IDR 3,400; FY25 P/E of 12.8x) is our top pick, primarily due to its AAI spin-off plan and potential significant dividends.

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