Singapore/Beijing: Top thermal coal importers China and India are slashing the Indonesian shipment of fuel-generating fuel in favor of energy-panic grade as the global fall in prices has made high quality coal more competitive.
Industry officials say that coal purchases from China and India from Indonesia, the world’s largest exporters, are falling faster than their overall thermal coal imports, as the two nations shift to high-calorie price (CV) coal that produces more energy per ton, says industry officials say.
“High CV coal is more expensive, but produces more energy for each dollar spent on current prices. A million tonne high CV coal can change from 1.2–1.3 million tonnes or even 1.5 million tonnes from Indonesia,” said Vasudev Pamanani, director of coal trader i-energy natural resources in India.
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In China, Indonesian medium-and low-calorie thermal coal is struggling to compete with a similar grade concessional Russian supply, said KPLE analyst Zeuan Lee.
Ramli Ahmed, Chairman of Indonesian Minor Obilin Energy, said that Indonesian coal may return to the rise in high grade prices due to the Middle East struggle, but low-CV coal will suffer until more energy-dense grade is competitive.
Mongolian coal in China and South African Coal in India have been the biggest beneficial at the expense of Indonesia, in its shares, in the first five months of 2025, these markets touched the record height in these markets, showing Chinese customs and Indian trade data.
Mistress analyst Xue Dingcui said that despite the fall in thermal coal prices in China, high production and better efficiency will promote Mongolian coal exports.
China and India have also purchased from Tanzania, which was largely absent from the global sebourne coal trade map until the war of Russia on Ukraine in 2022.
Indian traders have increased high -grade coal procurement from Kazhkhistan, Colombia and Mozambique this year, while Australian supply has gained a stake in China.
Indonesian and Australian coal index, depicting the grades liked by Chinese buyers, are trending less than October 2023, with a rapid decline compared to the Australian benchmark Indonesian.
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Overall, Chinese coal imports fell by about 10% to 137.4 million tonnes in the first five months of the year, while the shipment in India increased to more than 5% 74 million tonnes.
Indonesian exports have been the worst hit, with supply to China and India with 12.3% and 14.3% sliding respectively. The data from the analytics firm KPler suggests that the total coal exports of the South East Asian nation fell by 12% to 187 million tonnes.
To compete in exports, according to the Indonesian Mining Services Association, Indonesian minerals are pivying for domestic demand, with local delivery to increase by 3% this year and a decline of about 10%.
Domestic demand inspired by Nickel Smelters demand is on track to the highest part of Indonesian coal production in at least a decade and is currently 48.6%, which is currently in accordance with the government data reviewed by Reuters.
Indonesia capses the price of coal sold to electricity utilities, making smelters a more attractive option to export.
Ahmed of Ombilin said, “Smelter industry is the most bright place for now, we get better prices from the electricity industry or China sales.”
(Reporting by Sudarshan boon and Sam Lee; Sumna Nandi and Tony Munroe)