- Indonesia faces Q4 coal shortage, especially of low-CV grades
- Chinese traders hold contracts, balancing supply despite tightness
Mysteel Global: Supplies of thermal coal in Indonesia may face a shortage during October-December, several Chinese and Indonesian traders have warned, noting that some major coal producers in Indonesia have already sold out most of their cargoes scheduled for delivery during the period.
Supply would be particularly tight for low-calorific value (CV) grades, including the most-traded 3,800 kcal/kg NAR, they said.
These remarks came just after the end of Coaltrans Asia 2025 held during September 21-23 in Bali, where many participants expressed optimism about the Q4 performance, citing the support of seasonal heating demand from countries in the northern hemisphere.
At the meeting on September 22, Haryanto Damanik, secretary general of the Indonesian Coal Mining Association (APBI), predicted that the country’s coal production in 2025 would fall by 90-100 million tonnes (mnt) from last year to around 740 mnt – a prediction that early government figures seem to support.
Preliminary statistics provided by the Ministry of Energy and Mineral Resources (ESDM) show that Indonesia only produced 509 mnt of coal in the first nine months of 2025, or 68% of the country’s annual target of 739 mnt.
Haryanto explained that the decline in production is inseparable from uncertain global market conditions, which would outweigh the influence of supply tightness and drag prices down. According to the official, the average thermal coal price in 2025 is expected to hover around $100/t, far below that of $130/t in 2024.
The domestic thermal coal reference price (HBA) for 6,322 kcal/kg GAR coal (TM 12.26%, Sulfur 0.66%, Ash 7.94%) – set by the ESDM – averaged $111.6/tonne during January 1-September 15, compared with $121.48/t for the whole of 2024. The latest HBA reading for this grade published on September 15 stood at $103.49/t, up slightly from a four-year low of $97.65/t recorded on July 15.
Despite the potential supply shortage from Indonesian miners in Q4, these sources highlighted a possibility of ample supply being held by Chinese traders, many of whom have signed long-term contracts with Indonesian miners.
That means that many Q4 cargoes will shift from miners to traders, suggesting that overall supply may remain in balance. More importantly, Chinese traders are unlikely to rush into spot purchases at that time, even as demand in China rise for steam coal for winter heating. Given this scenario, it is still difficult to say whether the Q4 market will perform any better than it does now, a Chinese trader explained.
On September 24, the market retained a bullish tone with active offers and bids. Offers for Panamax 3,800 kcal/kg NAR coal rose to $46-47/t FOB Kalimantan, up slightly from $45-46/t largely seen in the previous week. Deals were concluded within this range, with some transactions even exceeding $47/t, sources noted.
Tenders called this week by Chinese utilities showed steady buying interest. On September 22, Yudean, a state-owned group located in South China’s Guangdong province, reportedly awarded a Panamax cargo of 3,800 kcal/kg NAR coal at a price net back to $47.2/t FOB Kalimantan for loading during October 20-November 20.
On September 24, Mysteel assessed Indonesian 3,800 kcal/kg NAR thermal coal at $46.5/t FOB Kalimantan, up by a tiny $0.1/t from the previous day, extending the rally that began at $43.3/t on September 3.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
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