The world’s biggest coal exporter, Indonesia, is looking to diversify in more Asian markets as it faces declining import demand from the top regional – and global – buyers, China and India.
Indonesian coal exporters want to grow their sales on the markets in the Association of Southeast Asian Nations (ASEAN), as well as south Asian importers Bangladesh and Pakistan which struggle to keep up with rising power demand, Fathul Nugroho, vice chair of the Association of Indonesian Energy, Mineral, and Coal Suppliers (Aspebindo), told local news outlet Tempo.
Indonesian exporters are now looking to the ASEAN markets Vietnam, the Philippines, and Malaysia, which want to increase coal purchases to boost power generation capacity and keep up with rising demand.
The market in Bangladesh is also a key export opportunity for Indonesia, as Bangladesh wants to raise its coal imports by 10 million tons per year to ease its power supply deficit.
Indonesia’s coal exports fell in the first half of this year was due to reduced demand from the main importers, China and India, the Indonesian Mining Association (IMA) said this weekend.
“The decrease in demand is driven by increased domestic coal production in China and India,” Aspebindo’s Nugroho noted.
China and India have reduced purchases of Indonesia’s lower-grade thermal coal as lower coal prices have made higher-grade coal competitive this year.
Higher calorific value (CV) coal is more expensive than supplies yielding less energy per unit burned. However, the slump in global coal prices has made even higher CV coal competitive.
China and India have seen declines in their overall coal imports in recent months amid higher local production and an oversupply on their domestic markets.
Asia’s imports of thermal coal by sea slipped by nearly 8% in July from a year earlier, as a rebound in Japanese and South Korean purchases couldn’t offset declines in top importers China and India, which have boosted domestic supply and stockpiles in recent months.
By Tsvetana Paraskova for Oilprice.com
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