Indonesia miners commit 8.4 mil mt coal to domestic market, short of 16 mil mt target
Coal miners in Indonesia have committed more coal to the domestic market on hopes that it would lead to an early revocation of the country’s export ban, according to a source, but the allocation fell short of the government’s targeted stockpiles for the market.
Miners have cumulatively committed 8.4 million mt for January, below the 16 million mt required to maintain stockpiles for state-owned PT Perusahaan Listrik Negara, or PLN, and independent power producers for a minimum of 20 days, a PLN source told S&P Global Platts.
Indonesian government Jan. 1 banned coal exports during the month amid concerns that lower supply at domestic power plants could lead to outages.
Miners said they have committed 2.1 million mt thermal coal in addition to the 5.3 million mt committed earlier. The source said the volume was for PLN’s 17 power plants and 55 independent plants.
“Earlier, some miners did not meet commitments, and some met only 60%,” a PLN source said. “Even in our current demand, we are anticipating 80% of commitments being delivered due to bad weather and transportation problems.”
The export ban will remain in effect until the stockpiles are sufficient for minimum of 20 days, according to the source.
The ban has caused uncertainty in the market, as supply to key consumers, including China and India, has been affected, with contracts already signed also debarred.
Prices of coal from other origins is expected to rise amid the lack of Indonesian coal, sources said.
The 4,200 kcal/kg GAR Indonesian-origin price has risen by $2/mt to $65.45/mt since Dec. 31, due to the supply uncertainty, even as bids and offers remain largely absent.
The price of Qinhuangdao 5,500 kcal/kg NAR was heard at Yuan 835/mt FOB [$131.02] Jan. 7, against Yuan 810/mt Dec. 31, according to Platts data. The price of 5,000 kcal/kg NAR was heard at Yuan 740/mt FOB Jan. 7, against Yuan 730/mt FOB Jan. 6.
Miners were expecting an early resolution to the export ban, as PLN’s requirement was touted around 5.1 million mt. But their hopes have faded as the commitments have not been fully honored.
“We are not sure whether the ban will be lifted before Jan. 31,” an Indonesia-based producer said.
A presentation by PLN to miners Dec. 13, seen by S&P Global Platts, forecast 2022 coal demand around 115 million mt for PLN and independent power producers, with PLN’s share at 56 million mt.
Power producers, meanwhile, are asking for early delivery of some February cargoes as they anticipate disruptions due to weather over the coming days, the PLN source said.