Indonesia recorded an 11% m-o-m decrease in its thermal coal exports in Jun’21 to 26 million tonnes (mn t) as against 29 mn t seen in May’21, CoalMint’s vessel line-up data revealed.
Exports from East Kalimantan dropped by 16% to 13.7 mn t, and that from South Kalimantan fell by 11% m-o-m to 9.12 mn t . However, coal exports from Sumatra and North Sumatra rose by 44% and 49% to 2 mn t and 418,330 t, respectively.
Tight supply, escalated prices pull down exports
The ongoing tight supply in Indonesia following heavy rainfall since the beginning of this year had significantly dampened production. Financial crunch due to lockdown restrictions since last year also prompted several mid-sized miners to permanently suspend their mining operations.
According to market participants, cargo availability continues to remain under pressure in the country due to the rising Covid-19 cases, and decline in production.
Further, rising Indonesian coal prices that moved up by an average of 9% m-o-m in Jun’21 along with resilient freight rates resulted in a decline in exports to major importing countries like India, Vietnam, and Taiwan.
Indonesia’s thermal coal exports to India fell sharply by 45% m-o-m to 3.8 mn t in Jun’21 amid weak domestic demand as several manufacturing units shifted to domestic coal.
Vietnam’s preference for domestic coal also pulled down its imports from Indonesia by 22% to 0.9 mn t. Taiwan’s coal imports plunged by 54% to 0.6 mn t, CoalMint vessel line-up data showed.
Indonesia’s coal exports to China and South Korea, however, rose by 8% m-o-m to 13.01 mn t and by 21% to 1.3 mn t, respectively in Jun’21, amid increased power consumption in the ongoing summer season.
Production target in Indonesia
The Indonesian government continues to keep its coal production target higher at 625 mn t in 2021, up from 550 mn t pegged earlier. In 2020, coal production in Indonesia stood at 563 mn t.
However, the country is also facing a domestic supply crunch as the Coal Mining Association has urged companies to ramp up their production and honour their contracts. The DMO requires coal producers to sell 25% of their total planned output domestically.
Outlook
Amidst the worsening Covid-19 crisis in the country, coal exports from Indonesia are likely to remain under pressure in Jul’21.
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