DIGIVESTASI - Coal prices slipped below US$ 140 per ton again, approaching the lowest level in the last two months. Based on Refinitiv data, the ICE Newcastle benchmark coal price for the October contract was recorded at US$ 138.40 per ton on Monday (9/9/2024), down 1.84% in a day. This decline brought coal prices to their lowest level since July 24, 2024, with a weakening trend that has lasted for five consecutive weeks.

The weakening of coal prices was triggered by weak economic data from China, where the contracting manufacturing sector reduced factory demand. According to Manufacturing PMI data from NBS, China's manufacturing sector has contracted for four consecutive months. In addition, consumer inflation in China only grew 0.6% on an annualized basis (yoy) in August, lower than the 0.7% forecast, indicating weak purchasing power.

As the world's largest coal importer, sluggish economic conditions in China worsen the outlook for global coal demand. However, recent bad weather could reduce production, potentially boosting coal prices going forward.

Meanwhile, as reported by *The Hindu Business Line*, Indian coal production and shipments plunged to the lowest level in more than 18 months in August 2024 due to heavy rainfall. India's coal production fell 7.5% on an annual basis and 15% on a monthly basis to 62.76 million tons, the lowest level since March 2023. Coal shipments, mainly for thermal power plants, also fell 6.35% yoy and 13% mom to 70.39 million tons, which was the lowest decline in more than a year and a half.

Historically, heavy rainfall in the June-September monsoon season often hampers mining and transportation activities in India, which has a significant impact on coal production and distribution.

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