Indonesia’s thermal coal exports fall marginally m-o-m in Apr’24

Indonesian thermal coal exports dropped by 2% m-o-m to 34.36 million tonnes (mnt) in April 2024 as against 35.24 mnt in March 2024, as per vessel line up data maintained with BigMint.

Subdued demand from major importing countries has impacted the market for Indonesia’s thermal coal. Demand remains tepid as top consuming nations are increasing reliance on abundant domestic stocks. Indonesia’s coal exports to China have declined by 14%. Chinese power plants are showing a preference for domestic coal over Indonesia’s thermal coal due to its competitive pricing. Additionally, sudden rains in southern China have further dampened demand from China.

Meanwhile, Indonesia’s thermal coal exports to India have dropped by 4% m-o-m. This decline is attributed to buyers adopting a wait-and-watch approach due to price volatility, ample existing stocks, and an increase in India’s domestic production.

Indonesian miners observed Ramadan holidays, leading to a temporary slowdown in production. Meanwhile, some miners extended their Ramadan holidays to suspend production, aiming to prevent further price drops due to the market’s existing shortage of demand. Additionally, supply constraints were experienced in the Sumatra region during this period. As a result, numerous spot vessels became stranded at ports, awaiting loading, thereby maintaining tight supply conditions in the Sumatra region. These factors collectively impacted Indonesia’s exports in April.

Exports to Philippines increased by 17% to 2.94 mnt in April 2024 as against 2.52 mnt in March, 2024. Exports to the Malaysia surge by 29% at 2.31 mnt. Shipments to South Korea (1.65 mnt) and Japan (1.47 mnt) increased by 7% and 6%, respectively.

Exports from Taboneo increased by 14% to 6.12 mnt in April 2024 as against 5.36 mnt in March 2024. Shipments from Samarinda increased significantly at 8.21 mnt in April, 2024 as against 3.62 mnt in March 2024. Supplies from Balikpapan and Muara Pantai fell by 11% and 8% respectively, in April, 2024.

Indonesia’s coal exports increased by 13% y-o-y to 34.36 mnt in April as against 30.42 mnt in April 2023. Indonesia’s exports are set to increase in the coming months because of expected increase in power demand in India during the summer season. This, along with more thermal coal exports to other South Asian countries where thermal power is widely used, is likely to increase coal imports from these countries.

Also, as temperatures rise in parts of China, demand is expected to go up. Inventories at Indian ports and power plants might decrease due to increased power demand. The Indian government has extended the mandate for imported coal-based power plants to run at full capacity until October, expecting high electricity demand during the summer and heatwaves. This extension may further increase import demand from India.