Coal costs to stabilize

KUALA LUMPUR: International coal costs have surged following the Russia-Ukraine struggle that has brought on the facility era business in Malaysia to be underneath strain, stated TNB Gasoline Companies Sdn Bhd (TNBF), Bernama reported.

Its head (procurement and provide chain), Abdul Halim Othman stated international coal costs are anticipated to stabilize inside six months from March when provide and demand ought to return to some semblance of normality, in keeping with Bernama.

TNBF, which is a wholly-owned subsidiary of Tenaga Nasional Bhd (TNB), was established to make sure the sale of coal to impartial energy producers which have an influence buy settlement with TNB is at an reasonably priced worth and on the required high quality.

It’s a non-profit group and its fundamental focus is on the provision of coal to make sure the continual operation of coal stations in order that the electrical energy provide in Peninsular Malaysia isn’t affected.

“Sustainable electrical energy provide is a pillar of the nation’s financial drive.

“When the financial system stabilizes, then the worth will fall once more as noticed in earlier years,” Abdul Halim advised Bernama by way of e mail not too long ago.

He stated the great financial progress file in 2021 resulted in excessive demand and rising international coal costs within the second and third quarters.

International coal costs declined once more and stabilized within the fourth quarter of 2021, however it didn’t final lengthy following Indonesia’s resolution to quickly halt coal exports in January 2022 to satisfy home demand.

He stated Malaysia imported many of the commodity from Indonesia which was the principle supply of power for electrical energy era within the nation.

“We will overcome the issue of the export ban as a result of we now have a comparatively giant inventory which may last as long as a month.

“The export ban lasted lower than a month and it appeared that the state of affairs returned to regular … (however) out of the blue the Russia-Ukraine struggle broke out which brought on costs to soar once more,” he stated.

Abdul Halim stated TNBF is continually monitoring the present market state of affairs and is now in a difficult state of affairs because it has to purchase coal at a better market charge.

“Demand for coal in Europe has risen sharply because the struggle as a result of an absence of gasoline provides from Russia.

“As a result of there are restrictions, they’ve to make use of coal and we now have to undergo this wave (improve in coal costs),” he stated.

Coal costs soared to a file excessive of over US$400 (RM1,687) a tonne in early March 2022 and US$291.60 (RM1,230) a tonne on April 8.

He stated TNBF additionally has long-term contracts with suppliers that set coal costs for a one-year interval to scale back the affect of sharp rises in coal costs.

As well as, TNBF has suppliers from a number of nations to make sure sufficient provide to proceed day by day operations whereas decreasing the danger of coal provide shortages, famous Abdul Halim.


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