On the 4th, news that “Indonesia will suspend coal exports” rapidly spread through energy markets. Officials from Indonesia's Ministry of Energy and Mineral Resources stated that miners have halted spot coal exports due to the government's proposed production cut plan. Last month, Indonesia issued production quotas to major miners that were 40% to 70% lower than 2025 levels. This news drew market attention, with coking coal futures and coal-related stocks seeing significant gains.

What some media outlets termed a “suspension of exports” was actually a market misinterpretation. Indonesia has not imposed a blanket export ban; rather, certain large coal mines are temporarily unable to quote prices or execute spot transactions because their 2026 production plan (RKAB) quotas remain undetermined. Influenced by this news, international coal prices rose, while domestic coal prices in production regions showed slower transmission, remaining relatively stable.

Indonesia Plans to Cut Export Quotas, International Coal Prices Rise in Response

According to overseas media reports, Indonesia's proposal to reduce export quotas stems from its rising domestic power demand and energy security concerns. In recent years, Southeast Asia's rapid economic growth has significantly increased Indonesia's reliance on coal and other basic energy sources. Historically, the country's coal export prices have far exceeded domestic reference prices, creating strong export incentives for coal enterprises and exacerbating supply shortages for domestic power plants.

Indonesia's coal exports have consistently accounted for a high proportion of its total production. By 2025, exports are projected to reach approximately 480 million tons, with around 200 million tons destined for China. These exports primarily consist of thermal coal with a calorific value of 3,800–5,000 kcal/kg, widely used in coastal power plants across South and East China. If Indonesia were to reduce exports by 40%–70% as reported, this could theoretically cut exports by 70–140 million tons, potentially impacting thermal coal supply in southern China.

Following the Indonesian news, FOB prices for Indonesian 3,800 kcal thermal coal have surged from $51 per ton a week ago to $59 per ton, a nearly 16% increase. During the same period, Australian 5,500 kcal coal prices also rose from $75 to $83.

The most significantly affected major mines are Bayan and BIB. Bayan had planned an annual output of approximately 80 million tons but received only a 25 million ton quota approval early this year; BIB also faces a quota shortfall of about 30 million tons. While other major mining areas have also experienced quota adjustments, their overall impact remains relatively limited.

The Indonesian government typically announces first-half quotas by late March each year, with potential mid-year adjustments (June-July). “All current statements represent interim measures, not final policy decisions.”

This implies that market concerns over a “sharp export decline” remain uncertain.

Since President Prabowo took office, resource controls have tightened. The core objective is not to restrict exports, but to stabilize coal prices and secure national tax revenue by controlling supply volumes.

Domestic restocking concludes; weak supply-demand dynamics result in relatively slow price transmission

Geographically, Indonesian coal primarily flows to regions south of Shandong Province in China, particularly coastal provinces like Guangdong, Guangxi, Fujian, and Zhejiang. Northern regions, with sufficient domestic production capacity, rely minimally on imported thermal coal. Domestic coal prices, especially in northern areas, exhibit relatively slow price transmission in response to the aforementioned developments.

Affected by Indonesia's RKAB market incident, Guangdong Power's bid price rose from last week's CNY440 to 458 this week, an increase of approximately $2. Meanwhile, northern regions saw little change in CCI prices today due to the approaching Chinese New Year and relatively quiet market activity. Manager Xi, head of a Shanxi coal trading firm, informed Cailian Press: “Shanxi's high-sulfur thermal coal (5,000 kcal/kg) remains stable at RMB 360–400/ton (tax-inclusive), while 4,500 kcal/kg coal is quoted around RMB 350/ton—prices unchanged from the previous two days.”

Currently, as winter stockpiling nears its end and the Spring Festival holiday approaches, downstream power plants and coking plants generally maintain reasonable inventory levels of 15–20 days, with restocking demand largely exhausted. Market participants now fear post-holiday price declines, leading traders to hold minimal inventory while end-users purchase only as needed. The overall market remains in a state of “weak supply and weak demand.”

Those with inventory want to sell at higher prices, but downstream buyers simply won't take it. Only essential contracts are being fulfilled, such as arbitrage opportunities arising from reduced rail freight rates. News of Indonesia's export suspension has reached northern spot markets slowly, with negligible impact.

Traders are hesitant to buy, while power plants fear excessive costs and refuse orders, causing spot market liquidity to plummet. This “wait-and-see—hoarding—price hike” positive feedback loop could easily spill over into actual arrivals in March-April. He believes the real impact will emerge after the Spring Festival. With work resuming in late February and the National People's Congress convening, safety inspections...

Traders are hesitant to purchase, while power plants are reluctant to place orders due to concerns over excessive costs, leading to a sharp decline in spot market liquidity. This positive feedback loop of “wait-and-see attitude—reluctance to sell—price increases” is highly likely to impact actual port arrivals in March and April. He believes the true impact will become apparent after the Spring Festival. With the resumption of work and production in late February, the convening of the National People's Congress and Chinese People's Political Consultative Conference, and stricter safety regulations, coupled with insufficient imported coal replenishment, coal supply may tighten in March. Although Bohai Rim ports appear to have ample inventories, the proportion of marketable coal available for circulation remains low. Once the import shortfall materializes—even if only as a short-term disruption—it could trigger rapid price increases.

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