
Indonesia's thermal coal export shipments to China fell 19% m-o-m to 9.4 million tonnes (mnt) in October as power utilities in the country curtailed purchases amid strict COVID restrictions.
China has reported hundreds of daily COVID-19 cases since late September and local governments have imposed strict mobility rules to contain the highly transmissible Omicron variant.
Import enquiries were lower in the first two weeks of October during the Golden Week Holidays and the Politburo meeting. However, the rising number of COVID cases has compelled power companies to remain on the sidelines for the entire month amid demand uncertainty.
Top economic planner, National Development and Reform Commission, has also set a new benchmark for annual medium-to-long-term contracts, much lower than Indonesian coal prices.
China's annual benchmark 5500 NAR grade contract prices have been set at RMB 675/t ($93/t) for 2023, cheaper by 55% from its domestic spot prices and 46% from imported Indonesian 5800 GAR grade coal prices.
Indonesia's, overall thermal coal exports were up by 2% at 31.5 mnt last month.
Indonesian coal trade flow into Asia
*Qty in mnt
Indonesian thermal coal exports to India rose sharply by 28% on rising power demand and strong economic growth. Expectations of rising manufacturing acitivity during the winter season prompted traders to pre-book supplies.
Shipments to major other Asian countries such as Phillippines, South Korea, Malaysia, and Thailand were also higher amid Indonesia's relatively cheaper coal prices compared with other origins.
Shipments to Bangladesh rose sharply by 45% amid rising power demand in the South Asian country.
Exports to Vietnam, Taiwan, and Pakistan were lower amid rising shipments from other origins.
Exports to Europe
Amongst European countries. Indonesia's coal exports to Poland rose by 45% last month as it geared up for the upcoming winter heating season.
Shipments to the Netherlands and Italy, however, fell over 50% amid strong inventory build-up for winter.
Outlook
Indonesian coal export shipments are expected to be in a tight range amid weak Chinese demand, while Asian demand is likely to be moderate. Exports to Europe may remain weak due to strong winter inventory.