Indonesian thermal coal exports rise by 9%, exports to China drop, other markets surge in 2022

Indonesia’s thermal coal exports increased by 9% y-o-y to 341.3 million tonnes (mnt) in calender year 2022 (CY22), CoalMint’s data showed. Meanwhile, exports to India recorded a 57% rise y-o-y. However, the shipments to China and Vietnam recorded a drop in 2022.

Qty in mnt

Indonesian shipments to India stood at 109.43 mnt in 2022. India faced a hotter summer in 2022, compelling the government to allow power utilities to import 10% of their coal requirement compulsorily for blending purpose along with domestic coal use. Of the total Indonesian coal imported by India in 2022, about 60% was imported during the months of March-July 2022, when summer was at its peak.

Apart from India, Indonesian coal shipments to South Korea and Japan also increased by 30% and 37% y-o-y to 25.84 mnt and 17.65 mnt in 2022, respectively.

In a significant development, Indonesia turned out to be the preferred alternative for thermal coal imports by some Asian countries amid changed global trade dynamics. The sanctions on Russian coal by European countries as a consequence of the Russia-Ukraine war, resulted in an increased demand for Australian coal from Europe. This factor has played a crucial role in keeping Australian coal’s prices elevated. As a result, key buyers of Australian coal like Japan and South Korea opted for more Indonesian coal.

High-CV Indonesian 5800 GAR prices averaged at $170/t FOB in CY 2022, an increase of 53% y-o-y. In contrast, Australian 5500 NAR prices averaged at $196/t FOB in CY 2022, 14% higher than Indonesian thermal coal prices.

Indonesian coal exports to Vietnam recorded a drop as the country used more of domestic coal and avoided booking the imported coal amid its high prices.

Outlook

Indonesian thermal coal exports are likely to remain under pressure in the upcoming months as the rising Covid cases in China may restrict its demand from the country. In case of India also, demand from power, textile and cement industries remained slow for imported coal due to abundant and cheaper availability of the domestic coal.