Indonesian coal faces uphill struggle to diversify exports away from China

China represents a huge market for thermal coal, and for regional suppliers there is no way to avoid the dragon. That’s especially true for Indonesia, the world’s largest exporter of thermal coal. According to the Bank of Indonesia, in 2017 the mining industry contributed about 4.7% to the Indonesian economy, if the commodity is priced in US dollars. “It is China, China, China, then number four perhaps is India, followed by Korea, Japan and Taiwan,” said a market source when asked about the demand for Indonesian thermal coal.    China is Indonesia’s top destination for total thermal coal sales (including bituminous coal, sub-bituminous coal and lignite), followed by India, S&P Global Platts data showed. Of the total 394 million mt thermal coal exported in 2018, about 31% headed to China and about 27% to India, according to S&P Global Analytics.  “We can’t always sell into China, but it’s inevitable because of the volume,” said one Indonesian producer. Indonesian producers Platts spoke to said there is always the risk of ‘putting all the eggs in one basket’, leaving coal prices too dependent on China’s import policies. Late last year, several Chinese ports were reportedly closed for thermal coal seaborne imports and… continue reading

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Source: CTRM Center

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