Indonesia’s thermal coal exports increased by 15% m-o-m to 28.14 million tonne (mnt) in February 2023 as against 24.43 mnt in January, CoalMint data showed.
Qty in mnt
China was the largest importer of Indonesian coal at 8.48 mnt in February, up 21% as against 7.02 mnt in January. The tariff on coal imports by China is to kick in from 1 April, 2023. Most buyers are cautious about procurement and preferred to stand on the sidelines for clearer clues on the evolving price scenario. Chinese mills are preferring weaker grade Indonesian coal for blending due to comparatively low prices compared to the Australian coal.
Indonesian shipments to India stood at 8.10 mnt. Shipments picked up by 60% m-o-m in February. Government’s recent mandate obligating operators of coal-based power plants to increase inventories by importing at least 6% of their coal demand by weight and easing restrictions on coal blending is positive for imports.
India’s coal production in February stood at 86.6 mnt. India’s largest coal producer, CIL’s coal production increased by 7% y-o-y to 68.77 mnt compared to 64.26 mnt in February 2022. India has been focusing on an improving domestic coal production to achieve its FY23 target of 900 mnt.
Indonesian coal shipments to South Korea, Philippines and Japan fell for the month by 26%, 2% and 11%, respectively.
Indonesian coal exports to Vietnam, however, increased by 38%. Vietnam’s coal demand is expected to increase in 2023 to 45.89 mnt, as per state power producer Vietnam Electricity (EVN).
Outlook
Indonesian thermal coal exports may continue to rise amid rising demand in Asian countries. Also, with coal-based plants in India beginning to run at full capacity post 16 March, shipments from Indonesia may increase further. However, upcoming Ramadan may tighten Indonesian supplies to some extent.
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