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Indonesia's thermal coal exports fall by 4% m-o-m in Jun'23
Non Coking
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13 Jul 2023, 13:30 IST
Steel Mint Insights

Indonesia's thermal coal exports fell by 4% m-o-m to 27.86 million tonnes (mnt) in June as against 29.16 mnt in May, data from Statistics Indonesia shows. Indonesia's exports dropped amid reduced buying interest from India and China on high coal inventory levels and surplus supplies.

qty in mnt

China was Indonesia's largest thermal coal export destination, with 6.93 mnt of coal being shipped to China, down 14% m-o-m as against 8.02 mnt in April. However, exports by Indonesia surged nearly twofold y-o-y.

Despite sluggish market trends over the last few weeks, there were signs of emerging demand in the Asian thermal coal market, with market sources suggesting that China's power sector and Japan were looking for high-calorific value coal to meet rising electricity demand

Exports to India down 22%

Shipments to India fell by 22% to 6.12 mnt as against 7.89 mnt in May. Shipments to India had a share of 22% of total Indonesian coal exports in June.

Factors affecting India's imports

Rise in domestic production: India's imports from Indonesia remained on the lower side due to strong growth in domestic production. State-run miner, Coal India Ltd (CIL), has posted double-digit growth in production during June. Production rose by 12% y-o-y to 58 mnt in June as against 51.56 mnt in June 2022.

High inventory levels: Coal inventory at power stations was assessed at 35.88 mnt towards June-end, which is sufficient for 13 days of power generation. Besides, the number of plants having a critical stock position has reduced to 61 currently from 87 in the year-ago period.

Major importers

China, India, Philippines, Vietnam and Japan were the top five destinations for Indonesian coal, which together had a share of 75% of total exports.

Coal exports to Philippines were recorded at 3.40 mnt, up 28% y-o-y and 45% m-o-m; shipments to Vietnam stood at 2.42 mnt, a more than twofold surge y-o-y and 42% on the month; and exports to Japan stood at 2.06 mnt, up 43% y-o-y and 39% m-o-m.

Indonesia has exported a total 172.71 mnt of thermal coal in the first six months of this year, up 11% on the year.

Indonesian coal exports may decline as demand in the Indian market has not rebounded over a couple of months due to restocking amid onset of monsoons, which generally weighs on power demand. With slow growth projected and huge domestic stockpiles, demand is not expected to pick up anytime soon. However, demand from China has certainly been a positive factor supporting the Indonesian thermal coal export market.

13 Jul 2023, 13:30 IST



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