Medium coal producers cut spot sales as govt plans drastic output cut
Thursday, February 5 2026 - 03:02 PM WIB
By Cepi Setiadi
Medium-scale coal producers in Indonesia are reducing, and in some cases halting, coal sales to the spot market as they prioritise long-term contractual obligations, a shift that comes amid government plans to sharply cut national coal output in 2026.
Industry officials said the move follows the Indonesian government’s proposal to reduce total coal production to around 600 million tonnes in 2026, down from an estimated 790 million tonnes in 2025, as part of efforts to support declining coal prices and rebalance supply and demand.
The changes were confirmed by FH Kristiono, Deputy General Secretary of the Indonesian Coal Mining Association (APBI-ICMA). He said medium producers are currently prioritising the fulfilment of existing long-term contracts rather than selling coal on the spot market.
“That’s correct. We are already reducing volumes under contract, let alone spot sales,” Kristiono said, adding that smaller-scale coal producers are now the main source of spot market supply.
Producers’ decisions align with uncertainties over approved production volumes under companies’ Work Plans and Budgets (RKAB), which have been lowered under the government’s planned output cuts.
Read also : RKAB disruptions, hauling ban pressure domestic coal supply in early 2026
“There is no spot market halt. It’s just that miners whose RKAB volumes have not yet been finalised are holding back sales,” said Yudhi Putro, Director of PT Kaldera Energi Nusantara.
Ramli Ahmad, President Director of PT Ombilin Energy, said production quota cuts naturally lead producers to prioritise long-term contracts and domestic market obligations (DMO) over spot sales.
“With production quota reductions, producers will certainly fulfil long-term contracts first. The spot market becomes the last priority,” Ramli said, noting that some producers still sell small volumes on the spot market after meeting contractual and DMO requirements.
The government’s planned production cut, part of a broader strategy to stabilise global coal prices amid oversupply, has reduced quotas for many miners, with cuts ranging widely across companies.
The shift in supply behaviour has tightened spot market availability, although spot volumes remain available in limited quantities compared with previous periods.
Editing by Alexander Ginting