- Indonesian supply risks underpin price floor despite weak Asian demand
- Wide bid-offer gaps reflect policy uncertainty and firm producer stance
Indonesia, the world’s largest exporter of low- and mid-CV coal, has entered a period of unusual pricing firmness — even as buyers across China and India push aggressively for discounts.
The reason? A perfect storm of supply-side uncertainty heading into 2026.
Unapproved 2026 production quotas
Indonesia’s government has not yet finalised next year’s production quota. This vacuum — highly unusual for December — has made miners reluctant to sell aggressively into falling markets.
Some fear:
- Production caps
- Export curbs
- A potential export tax on thermal coal
- New domestic supply obligations
Wet-weather disruptions
The January-March monsoon threatens:
- Reduced mine productivity
- Haul-road damage
- Port congestion
- Lower-than-expected output
Producers know this well: January-March is historically their costliest and least predictable quarter.
Market response
Chinese buyers have retreated, leaving offers untouched:
- 3,800 GAR offers remain at $40-41/t FOB, with bids still stuck in the high $30s
- Ultra-low-rank bids at $38/t FOB find no counterparty
- Indonesian 4200 GAR remains India’s most competitive fuel, delivered at INR 1,350-1,390/Gcal
Impact on Asia
The bid-offer gap is now a core sign of stress:
- Soft demand
- Firm supply psychology
- Policy-dependent forward pricing
Indonesia has effectively set a floor for regional low-CV prices — even as global coal enters a deeply bearish winter.
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