Indonesian coal exports rose by 18% in January-May 2024, reaching 171.95 million tonnes (mnt) compared to 145.73 mnt during the same period in 2023, as per vessel line up data with BigMint. In January-May 2024, Indonesian non-coking coal exports stood at 169.98 mnt and coking coal at 1.96 mnt. Indonesian thermal coal exports increased by 12% m-o-m to 38.35 mnt in May 2024 as against 34.36 mnt in April 2024.
Why Indonesia’s exports increased?
- China, the largest importer of Indonesian coal, saw an 11% increase in imports, totaling 50.20 mnt in January- May 2024 compared to 45.07 mnt in the same period last year. This growth is largely influenced by the introduction of an export tax by the Russian government, which has reduced Russian coal volumes in the global market. Consequently, Chinese buyers have turned to Indonesian coal to fill the gap, driving up import volumes. China has lost its appetite for Russian coal as import taxes and logistical issues have pushed Asia’s biggest buyer towards cheaper alternatives.
- India’s coal imports from Indonesia surged nearly by 27%, from 49.63 mnt in January-May 2024 as against 39.10 mnt in the same period last year. The primary driver behind this increase is the high demand for power due to extreme weather conditions. India experienced an unusually hot summer and a delayed monsoon season, resulting in higher electricity consumption for cooling purposes and thereby increasing the need for coal-fired power generation. Additionally, pre-monsoon restocking in India contributed to the increase in imports from Indonesia.
- Vietnam’s coal imports nearly doubled from 4.84 mnt to 9.51 mnt during January-May 2024 compared to the same period last year. This rise is due to Vietnam’s efforts to avoid power cuts and ensure a stable power supply for investors. The country is increasing coal imports to prevent a repeat of last year’s power shortages. Vietnam, a regional manufacturing hub heavily reliant on coal, faced pressure to maintain power supplies during heatwaves. Coal-fired plants, accounting for 37.5% of installed capacity, recently produced around 67% of total electricity. Vietnam, hosting large operations of companies like Samsung, Foxconn, Intel, and Canon, vowed to prevent electricity shortages. However, Vietnam has struggled to boost domestic coal production, necessitating higher imports.
- Bangladesh saw a substantial increase of 73% in coal imports, rising from 1.98 mnt to 3.42 mnt during January-May 2024 compared to the same period last year. This uptick is linked to improving economic activities in the country. As Bangladesh’s economy recovers, being one of the world’s largest clothing producers and exporters, it has experienced sharp growth in energy demand from its population and businesses. As industrial activities gain momentum, the demand for energy, and consequently coal, has increased.
Philippines, Malaysia, South Korea: steady growth
Philippines’ coal imports from Indonesia increased by 20% increase to 13.11 mnt, Malaysia seen an uptick in coal imports from Indonesia by 16% to 9.55 mnt. Indonesia exports to south Korea increases Slightly to 10.26 mnt. These countries have shown steady growth in coal imports due to a combination of factors such as expanding industrial activities, increasing energy demands, and stable economic conditions.
Declines: Hong Kong, Pakistan
Not all markets experienced growth. Hong Kong’s coal imports declined by 20% to 2.69 mnt, and Pakistan saw a significant drop of 49% to 0.38 mnt. The decline in Pakistan can be attributed to currency issues, high inflation, and slower industrial activities. These economic challenges have dampened the country’s demand for coal.
Indonesia coal exports m-o-m
Indonesia’s exports to China increased by 25% m-o-m to 11.05 mnt in May as against 8.87 mnt in April. Shipments to India remained stable m-o-m to 10.63 mnt in May as against 10.65 mnt in April. Exports to South Korea saw an uptick of 5% to 1.73 mnt in May as against 1.65 mnt in April. Indonesia’s coal exports to Vietnam increased significantly to 3.14 mnt.
Port- wise exports
Exports from Taboneo decreased by 25% to 29.06 mnt in January-May as against 38.85 mnt during same period last year. Shipments from Tanjung Bara rose by 49% at 15.90 mnt in January- May, 2024 as against 10.64 mnt during same period last year. Supplies from Muara Pantai and Tarahan increased significantly, respectively, during January- May 2024.
Outlook
The 18% increase in Indonesian coal exports during the first five months of 2024 underscores the complex interplay of global economic trends, regional energy demands, and geopolitical factors. As countries navigate their energy needs and economic recovery, Indonesia remains a crucial supplier in the global coal market. Understanding these dynamics helps stakeholders anticipate market movements and adjust their strategies accordingly.