Indonesia coal exports surge into the New Year even as global seaborne thermal demand slows

Indonesian coal exports are beginning 2023 in complete contrast from where Indonesia was at the same time last year. S&P Global Commodities at Sea data for December 2022 indicates over 45 million mt of vessel loadings and over 13.5 million mt loaded through the first eleven days of January. This contrasts with January 2022, which left the global seaborne thermal coal market in a volatile state after the Indonesian export ban was enacted to meet domestic supply. This ban displaced around 36 million mt of thermal coal, or about 4% of the global seaborne supply.

The S&P Global Commodity Insights outlook for 2023 is for Indonesia's coal exports to rise around 15-20 million mt to 465 million mt. The spot physical price of the 4,200 kcal/kg material declined from $93.45/mt on 20 December and $86.75/mt on 9 January. In Q1 2023, it is forecast at around $78/mt as demand will remain soft amid mild winter temperatures and an early start to spring. The Chinese Lunar New Year holiday period during January/February has created a slow period of industrial demand at the start of the year, but demand will gradually improve from Q2. S&P Global Commodity Insights forecasts the Indonesia 4,200 kcal/kg GAR export material to trend down in 2023 to average around $70/mt.

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This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.