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Adaro Energy Eyes Modest Growth in Coal Sales for 2024 Despite Price Drop

Indonesian coal producer Adaro Energy is aiming for slightly higher coal sales in 2024, targeting a range of 65 million to 67 million metric tonnes (mt). This represents a marginal increase compared to the 65.71 million mt sold in 2023, according to a company statement.

While sales volume saw a 7% increase in 2023, the company’s revenue declined by 20%. This drop is attributed to a significant decrease (26%) in the average selling price of coal during the year.

The decline in average selling price reflects a broader market trend. After reaching elevated levels in April-September 2022 due to the Russia-Ukraine conflict and weather-related issues, global thermal coal prices started to correct downward in October 2022.

Despite the falling prices, Adaro managed to maintain its production volume, recording 65.88 million mt in 2023, a 5% increase compared to 2022. However, the company acknowledges that the “increment in operational results was offset by a 26% decline in the average selling price” in their statement.

Looking back at 2022, Adaro experienced a record year due to exceptional circumstances. The average selling price in 2022 saw a significant increase of 74% year-on-year due to global market disruptions.

Breakdown of Adaro’s 2023 Coal Sales:

  • 20%: Northeast Asia
  • 22%: Southeast Asia
  • 25%: Domestic Indonesian market
  • 21%: China (increased from 12% in 2022)
  • Similar: India (compared to 2022)

While demand for Indonesian thermal coal remained subdued throughout most of 2023, temporary buying by China in certain periods helped push prices upwards. However, the overall market trend of declining prices is reflected in Adaro’s average selling price and revenue figures.

Going forward, Adaro’s 2024 sales target suggests a cautious approach. Despite aiming for slight growth, the company is likely navigating a challenging market environment with lower coal prices.

Source: TheCoalTrader, AI generated