After rising sharply in May and June, Indonesia’s thermal coal export shipments to India eased considerably falling by 19% m-o-m to 11.4 million tonnes (mnt) in July 2022, CoalMint vessel line-up data reveals.
Cooling summer temperatures with the onset of monsoon and weak domestic manufacturing activity weighed on procurement activity.
Heavy rains across several parts of the country resulted in a drop in India’s power consumption by 4% m-o-m to 128.38 billion units (BU) in July. The non-power sector, on the other hand, worked at minimal capacity due to weak sales volumes in the seasonally dull monsoon period.
The average thermal coal inventory levels at power plants also increased to 28 mnt in July, up slightly by 4% from June and by 25% since April this year.
Indonesian coal exports to key countries on Jul’22
Indonesia’s total thermal coal exports in July stood at 31 mnt, down by 6% m-o-m basis, as per the CoalMint’s data.
Indonesian coal shipments to key buyer China, however, rose 17% m-o-m in July. The rise came with low-CV inquiries picking up amid rise in temperatures, reduced hydropower generation and stable Indonesian coal prices.
However, on a y-o-y basis, exports to China fell by 21% last month due to increased coal arrivals from Russia this year.
Indonesian thermal coal shipments to Japan also recorded a 43% m-o-m rise amid the latter’s rising power demand. Amid sanctions on Russian coal, Japan is meeting its high-CV coal requirement from Indonesia and Australia.
In the European Union, exports to Poland recorded a surge as their embargo on Russian coal exports came into effect from mid-August.
After rising in June, exports to South Korea fell by 9% to 2 mnt in July. Amid higher-than-expected summer temperatures this year, the country activated emergency measures, including controls on the use of air conditioners at homes, offices and plants so that its power reserve should fall below 5.5 GW. No such measure had been taken since August 2013.
Short-term outlook
While China and India are heard to be back in the market to book low-CV Indonesian coal with a fall in prices and rising temperatures in China, rising coal demand in the Indonesian domestic market may affect exports from the country next month. The Indonesian government has recently banned exports from 48 companies after they failed to cite specific reasons for being unable to meet their Domestic Market Obligation (DMO). Several coal mining companies also have failed to reach their DMO due to heavy rainfall this year.
Leave a Reply