Indonesia coal exports face pressure as China demand weakens
Monday, March 23 2026 - 07:57 PM WIB
By Dominikus
Indonesia’s coal exports are coming under pressure as demand from China weakens amid strong domestic supply and high inventories, reducing reliance on imported cargoes, an industry official said.
China, Indonesia’s largest export market, imported about 490 million tonnes of coal in 2025, down 9.6% from a year earlier, with thermal coal imports falling by 11.5%, according to data presented by Gita Mahyarani, executive director of the Indonesian Coal Mining Association (APBI-ICMA), at an industry conference on March 19.
The decline comes as China boosts domestic output, which reached approximately 4.83 billion tonnes in 2025 and is expected to increase further in 2026. At the same time, inventories across mines, ports and power plants have remained at mid-to-high levels, reducing the need for additional imports.
Indonesia accounted for about 44.2% of China’s total coal imports in 2025, equivalent to roughly 211 million tonnes, maintaining its position as the country’s largest supplier.
However, the competitiveness of Indonesian coal has been affected by narrowing price differences between domestic and imported coal in China. Rising freight costs, currency movements and policy-related supply adjustments have increased import costs, while domestic Chinese coal prices have remained relatively stable.
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This has made buyers more price-sensitive and reduced demand for imported coal.
Indonesia’s own supply dynamics are also shifting. The government has set a coal production target of around 600 million tonnes for 2026, compared with 790 million tonnes in 2025, although actual output is expected to reach between 700 million and 730 million tonnes.
At the same time, domestic consumption is increasing, driven by demand from power generation and downstream industries, which could further limit export availability.
Competition from other suppliers is also intensifying. Mongolia has expanded its share in China, particularly in coking coal, supported by lower logistics costs through land-based routes, while Russia continues to offer discounted coal to Asian buyers.
“Coal remains a critical energy source in Asia, accounting for nearly half of the region’s total energy supply,” Mahyarani said.
Indonesian exporters may increasingly look to alternative markets such as India and Southeast Asia, where demand remains relatively stable, although these markets are also undergoing structural changes.
Editing by Alexander Ginting