Indonesia’s thermal coal export shipments to India witnessed a whopping 85% m-o-m rise to 14.4 mnt in May 2022, CoalMint vessel line-up data revealed. Stable coal prices boosted shipments to Indian utilities which are already reeling under a domestic supply crunch.
With rising power demand in India, power utilities in the country focussed on rebuilding inventory as the government mandated to increase the share of imported coal in blending.
Thus, Indian traders picked up their purchases while shipments from other origins remained weak amid elevated prices.
Indonesian coal shipments to a host of other destinations, however, recorded a negative growth due to the expectation of prices easing further.
Trade balancing
*Qty in mnt, exports to EU has been included in others
The sharp fall in exports to major countries has resulted in a 3% m-o-m drop in net exports of Indonesian coal in May which stood at 31.6 mnt.
Although not substantial, Indonesian coal exports to the Netherlands continued to grow by 24% m-o-m to 0.07 mnt in May as the country seeks alternate sources to replace Russian supplies.
Why did exports to key buying countries drop?
Export shipments to China fell sharply by 36% last month as Chinese traders deferred major import bookings amid a sharp decline in its domestic coal prices as top economic planner NDRC imposed price ceiling.
Shipments to Japan fell by 15% from Indonesia as domestic utilities (in Japan) preferred high-CV Australian coal cargoes to meet their carbon emission norms.
Exports to South Korea recorded a 34% decline last month surrounding elevated coal prices on a yearly basis. South Korea’s coal imports have been on a declining trajectory since the beginning of this year.
Shipments to other Southeast Asian countries also fell sharply as buyers awaited further price correction, while Indonesian miners held offers to avoid any major losses.
Short-term outlook
The growing demand from India amid ongoing domestic coal shortage is likely to support Indonesian exports in the upcoming month with domestic miner CIL issuing tenders to build stockpile ahead of the monsoon season.
Indonesian coal demand from China may also see a rise with increase in domestic coal prices after gradual easing of lockdown restrictions.
Leave a Reply