Indonesia’s thermal coal exports witnessed a whopping 161% m-o-m rise to 27.7 mnt in Feb’22 as miners expedited deliveries that came to a halt in Jan’22 surrounding the export ban.
For the most part of Feb’22, miners prioritised fulfilling old deliveries and redirected supply to power plants to meet their domestic market obligation.
Shipments to major exporting countries recorded a sharp rise last month with highest supply to China, followed by India, and Japan.
Thermal coal exports to China rose by a whopping 127% m-o-m to 8.6 mnt in Feb’22 with old bookings delivered. Further, strong inventory rebuilding demand by power utilities ahead of the summer season also contributed to the rise.
Shipments to India rise sharply in Feb’22
Shipments to India also recorded a significant 302% m-o-m rise to 7.5 mnt last month as majority of old cargoes arrived at Indian ports. Limited domestic availability for the non-power sector had compelled end-users to rely more on imported coal.
Notably, Indian imports of Indonesian coal have seen a consistent fall over the last few months amid escalated prices.
Although there has been a m-o-m increase in India’s imports, the procurement pattern of major importers showed a decline by 17% since Nov’21 when Indonesian coal prices had touched all-time high to above $200/t in Nov’21.
Buying by major players 3 months apart
This decline can be attributed to supply constraints from Indonesia and elevated prices, making Indian users to switch more to domestic coal.
Shipments to key Asian countries rise as gas prices rally
Indonesia’s thermal coal exports to Japan rose over 200% m-o-m to 2.5 mnt, while those to South Korea rose by 87% m-o-m to 2.1 mnt last month.
The sharp rise in shipments to these countries came as a surge in natural gas prices made thermal coal procurement more competitive last month. Supply of LNG also remained limited throughout the month with the geopolitical tension around Russia and Ukraine that made LNG prices rally by 22% m-o-m basis in Feb’22.
Thermal coal shipments to the Philippines and Malaysia also rose sharply to 2.1 mnt and 1.4 mnt, respectively as these countries predominantly depend upon the imported material for power generation.
Short term outlook
Indonesian thermal coal exports are likely to rise in the upcoming months amid rising demand in Asia and Europe as the restrictions on Russian exports aggravate the already tight coal supply situation globally. However, heavy rainfall activity in key mining regions in Indonesia currently and logistic disruptions at ports may curb any major rise in exports in the near term. Indian buyers, on the other hand, continue to stick to the sidelines, waiting for prices to stabilise.
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