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31 January 2025

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Coal Weekly (24 – 30 January 2025): Avg. USD 116.4/ton (-4.1% WoW)

Recent Catalysts Driving the Price

  • Over the past five trading days, average coal prices plunged to USD 116.4/ton (-4.1% WoW), as Trump's plan to boost oil and coal supplies exerted negative sentiment on the sector, which was exacerbated by plant closures during Chinese New Year causing reduced market liquidity and demand.
  • Additionally, China’s January manufacturing PMI fell slightly to 49.1 (Est.: 50.1), while non-manufacturing PMI dropped sharply to 50.2 (Est.: 52.2), reflecting weaker purchasing activity. The slowdown was further evident in China's seaborne coal imports, projected to decline to 28.0 Mt (-26% MoM; Dec: 37.59 Mt), signalling subdued industrial demand.
  • Given the above mention industry development, we may see potential downside to our 2025 coal price forecast of USD 120/t (YTD: USD 118.6/t, FY24: USD 136.4/t). On the stock front, ADRO (TP IDR 3,400; FY25 P/E of 12.8x) is our top pick, primarily due to its initiative to venture towards green business as well as ADMR and SIS’ contributions to earnings.

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