Indonesian coal supply to tighten as government impose sanctions on exports

The Indonesian Ministry of Energy and Mineral Resources (ESDM) has decided to impose sanctions on coal exports of 34 companies as they failed to fulfill their domestic coal supply obligations with state-utility PT PLN (Persero) and PT PLN Batu Bara for the period of Jan-Jul’21. This is likely to hamper about 50-60 mnt of coal exports from Indonesia worsening global thermal coal supplies especially during summer months in Northeast Asia. This would also push up Indonesian thermal coal prices in the coming days, that are already elevated amid surged Chinese demand.