Commodity Insights

Indonesian coal exports hindered by inclement weather

Commodity Insights expects Indonesia’s coal production to reach 550mt in 2021, 60mt lower than the 610mt government target due to inclement weather.

With wetter then expected mining conditions since July 2021, Indonesia’s Ministry of Energy and Mineral Resources (MEMR) has revised down the country’s total coal production outlook from 625mt (set in April 2021) to 610mt by the end of December (2021). According to Sujatmiko, Director of Coal Business Development at the MEMR, 610mt will meet Indonesia’s domestic demand and the state revenue target for coal.

In spite of this, miners have indicated that a number of challenges remain including limited supply of heavy equipment and bad weather. This has delayed the expected ramp up in production to meet the government targets

Commodity Insights has tracked rainfall in Indonesia since 2000 and the latest data (available to our Thermal Coal Unlocked customers) confirms that the second half of 2021 is higher than the previous two years.

Through September 2021, the country’s total coal production reached 409mt, or 65% of the governments April target. Assuming the average monthly production across the last three months of 2021 is 47mt, this will leave Indonesia ~50mt short in 2021.

Commodity Insights estimates YTD exports were 312mt through September, up 13% or 36mt for the year. Comparatively, domestic coal consumption through Sepetember 2021 was 87mt, up 8% on the same period in 2020. 

Accordingly, Commodity Insights is forecasting that Indonesia will export 430mt in 2021 which is an increase of 8% on 2020 or 33mt.

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