Indonesia's record-breaking coal production in CY'24 likely to be repeated in CY'25

• Exports to China may be stable y-o-y in CY'25
  
  
• Strong domestic coal demand to boost output
  
  

Mysteel Global: Indonesia's coal production this year is expected to extend last year's record-breaking streak, driven by robust demand from China and Indonesia's domestic users, local media Bisnis reported on 14 January, citing the Indonesian Coal Mining Association (APBI).

The Acting Executive Director of APBI, Gita Mahyarani, projected further growth in Indonesia's coal production this year but stopped short of providing specific figures, only mentioning that overall output might not stray far from 2024's record-breaking 831.05 million tonnes (mnt).

The figure Mahyarani quoted is preliminary data provided by the Ministry of Energy and Mineral Resources (ESDM), which far exceeded Jakarta's 2024 target of 710 mnt by 17.1% and 2023's output of 775.18 mnt by 7.2%.

Mahyarani attributed the 2024 production surge to strong demand from China as well as other ASEAN nations. China, the world's top coal consumer, logged coal imports at an all-time high of 542.7 mnt in 2024, soaring 14.4% from a year earlier, the country's customs data showed on Monday.

Besides the likelihood of Chinese import figures for Indonesian coal this year being similar to last year's, Mahyarani was also quoted as saying that Indonesia's strong domestic coal demand for electricity generation and smelting this year would also bolster coal production.

Indonesia's coal sales in 2024 totalled 813.06 mnt, achieving 114.52% of the country's annual target, with 378.95 mnt supplied domestically and 434.11 mnt exported, ESDM data showed.

However, despite the official's optimism regarding output this year, uncertainties such as China's domestic production policy and weakening prices may discourage Indonesian miners from ramping up output, Mysteel Global notes.

China is also the world's largest coal producer, with output in 2024 believed to have topped 2023's record of 4.7 billion tonnes (bnt). Market participants predict that the country will keep its coal output elevated this year, but details remain uncertain, and given China's mammoth production size, any tiny changes will heavily impact import volumes.

Meanwhile, price fluctuations also pose challenges for Indonesian coal producers. According to Mysteel's assessment for Indonesian 3,800 kcal/kg NAR coal, prices averaged $56/tonne (t) FOB Kalimantan for the entire year of 2024, down sharply from $64.8/t a year earlier. Prices this early into the new year have been subdued, remaining at $51/t for the first half of January, the assessment showed.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.