Coalindo methodology

General principles

Coalindo assessments are derived from the inputs supplied by its panelists on a weekly basis. Coalindo applies various reliability tests on the submissions, after which the remaining submissions are then averaged for each grade assessed. These final assessments are submitted to Argus as the Coalindo contribution to the Argus/Coalindo Indonesian Coal Index.

The panel system

The Coalindo panels are comprised of a wide number of members balanced between representatives of coal producers, coal consumers and coal market intermediaries (traders and brokers). Coalindo ensures that no one element of the market is over-represented.

The panel’s price submissions

Panel members submit their views of the market price of Indonesian coal to Coalindo every week on the last working day of the week at  5:00pm Jakarta time. All credible and active market participants are encouraged to contribute. These price submissions must represent the value of actual deals or the value at which a deal could be done in the open market for delivery over the coming two prompt months. The prompt month rolls on the first working day of the previous month. For example, Coalindo starts assessing the August and September contracts from the first working day in July.

Panelists are also encouraged to submit an addendum recording transactions they have made over the past week indicating coal specifications involved, volume and loading month for the seaborne export market. All information will be treated as confidential.

Panel reliability

The submissions made by the panel are reviewed by Coalindo and its representatives to ensure that they are reliable and representative of the prompt spot market. Coalindo and its representatives may use a variety of means to ensure the reliability of the panel submissions, including but not limited to:

•  Excluding any submissions that are more than 20%higher or lower than inputs that were used in previous weeks if regional market movements do not justify this.
• Eliminating the top 10%and bottom 10%of submissions.
• Other tests determined by Coalindo to be appropriate and proper to ensure accuracy. These can include consideration of transactions reported.

Coalindo carries out regular reviews of each panel member’s submissions to ensure that there is no excessive high-side or low-side bias in their contributions. Panelists are offered regular feedback and support. Coalindo reserves the right to further review and/or exclude individual panelist submissions if the results of thepanelists’ price survey differ sharply from the latest deals concluded in the market. This is to ensure the Coalindocontribution to the ICI indices is as representative of the week’s market activity as possible.

Panelist confidentiality

Coalindo treats each individual panelist’s inputs on an entirely confidential basis.

Latest revision: December 2021

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