Indonesia's thermal coal export shipments remained stable on a m-o-m basis at 30.6 million tonnes (mn t) in Aug'21, CoalMint's vessel line-up data revealed.

Heavy rainfall at Indonesia's key mining regions last month led to slowdown in production and delay in shipments, further capping the rise in the country's thermal coal exports which have been on a rising trajectory since the beginning of this year.

Export shipments from south Kalimantan fell by 6% m-o-m to 10 mn t, and from east Kalimantan had risen marginally by 1% m-o-m to 17 mn t.

On the other hand, coal exports from Sumatra were up 12% m-o-m to 2.3 mn t, while those from north Sumatra stood at 0.87 mn t.

Deepening supply tightness curbs exports

Flash floods and record heavy rainfall in south and east Kalimantan resulted in a sharp drop in coal production last month, and also in deliveries amid lower cargo availability.

Several miners had also invoked Force Majeure on deliveries amid flooding at mines, while other affected producers were compelled to delay laycans to ensure deliveries to domestic power utility Perusahaan Listrik Negara (PLN).

The fast spread of Covid-19 infections at mine sites had also affected port and mining operations, which pulled up the Indonesian 5,500 GAR coal prices by 15% m-o-m to $115/t.

Indonesia's benchmark coal price, also known as HBA price (Harga Batubara Acuan), further rose to $150/t for Sept'21, up 15% on a monthly basis. The benchmark price has been trading at a decadal high since the last few months amid constrained coal supply in the country.

Exports to India fall 8%

Indonesia's thermal coal export shipments to India dropped by 8% m-o-m to 5.13 mn t in Aug'21 as importers avoided making any major purchases at the elevated prices. Amid the sharp rise in high-CV Indonesian coal prices, majority of the bookings were done for low-CV coal.

Coal-consuming units in the country increasingly shifted towards low-CV imported coal blending with domestic coal to run operations.

Coal exports to South Korea also fell 6% m-o-m to 1.91 mn t. An increase in demand for LNG imports last month pulled down the country's thermal coal imports.

Shipments to the Philippines were recorded at 1.60 mn t, down 20% m-o-m, CoalMint vessel line-up data showed.

Export to China and Vietnam rise

Despite the rise in coal prices, Chinese traders booked a total of 15.2 mn t of Indonesian coal last month, up 13% m-o-m amid robust demand by power utilities.

Indonesian coal procurement by the country took a slight breather during mid-August when vessel congestion at Chinese ports due to strict quarantine rules resulted in sellers cancelling or delaying shipments.

However, by the end of last month, Chinese power utilities began their winter restocking as several of them issued thermal coal tenders ranging from 3,800-5,300 GAR coal for Sept-Oct'21 delivery.

The restocking comes against the backdrop of higher domestic thermal coal prices in China, and the lower-than-expected coal stockpiles at power plants and ports in the country.

Exports to Vietnam also rose 12% m-o-m to 1.18 mn t last month due to its peak summer temperatures.

Outlook

Despite strong Chinese and even Indian demand due to domestic coal shortage, Indonesian coal exports in September are likely to get restricted amid torrential rains, especially at mining regions.