Indonesia’s thermal coal exports to India fell sharply by 29% y-o-y to 69.9 million tonnes (mn t) in CY’21, custom data showed. The country’s overall exports stood at 313 mnt, down marginally by 2% y-o-y.
The sharp fall in shipments came as thermal coal prices more than doubled last year amid supply disruption, which compelled Indian buyers to delay purchases.
High-CV Indonesian 5800 GAR prices averaged $104/t on FOB basis in CY’21, an increase of 93% y-o-y, while the mid CV 4200 GAR prices rose by a whopping 107% y-o-y to an average $63/t, FOB.
Several end-users also preferred domestic bookings, which further weighed on imported demand.
After supply constraints in Sept-Oct’21, CIL’s coal output picked up to keep pace with rising domestic demand. However, on a y-o-y basis production was largely unchanged at 617 mnt in CY’21.
Shipments to China rise manifold
Indonesia’s total thermal coal exports to China recorded the highest volume, rising by 80% y-o-y to 101 mnt in CY’21 as the latter faced a series of coal supply contraints.
Following the imported coal ban on Australia since the latter half of CY’20, China has been struggling to fill the gap with rising domestic production and higher imports from Indonesia, South Africa, Russia, and Mongolia.
Coal output in the country picked up since Oct’21 to meet its rising winter demand following an acute coal supply crunch in Aug-Sept’21. The country’s total coal production last year rose by 5% y-o-y to 4.5 bnt.
Exports to key Asian buyers decline
Indonesia’s thermal coal exports to South Korea fell 16% y-o-y to 19.8 mnt in CY’21 due to resilient coal prices and the latter’s attempt to reduce its reliance on power generation via coal.
The country permanently closed down two of its oldest coal-fired power plants last year, and is planning to further shut down 10 such ageing coal-fired plants by May 2022.
Exports to Japan also fell by 20% y-o-y to 13 mnt, while export shipments to Vietnam were at 15 mnt, down by 18% y-o-y in CY’21.
A sharp fall in sales to these countries, however, was limited due to the volatile natural gas market, which increased coal procurement in the latter half of 2021.
Outlook
Indonesian thermal coal exports are likely to remain under pressure in the upcoming months as the government’s recent curbs on its coal exports have delayed shipments to a large extent.
Since the lifting of the ban, miners continue to clear the backlog and have been declining to offer till Mar’22 amid tight supply conditions.
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