According to information released by CNBC Indonesia on September 2, international thermal coal prices soared to a two-month high yesterday (September 1), driven by rising global oil prices and concerns regarding coal supplies.

Data from Refinitiv shows that during trading on Tuesday (September 2), the price of the global thermal coal benchmark—the ICE Newcastle thermal coal futures contract expiring in October—rose to $147.75 per tonne. This marked a single-day increase of 2.6%, bringing the price close to the $150-per-tonne mark and reaching its highest level since June 11 (over two months ago). This extended a recent upward trend, with prices climbing a cumulative 6.8% over six consecutive days.

The rise in coal prices has been supported by recent gains in oil prices. The surge is driven by sustained high global energy demand and ongoing concerns regarding coal supplies.

During trading on Tuesday (September 1), Brent crude oil prices closed up 4.6% at $94.65 per barrel, while WTI crude rose 0.6% to $90.77 per barrel. Over a two-day period, both WTI and Brent crude prices surged by 6%.

Coal Remains the World's Largest Source of Electricity Generation

The International Energy Agency (IEA) recently noted that coal remains the world's largest source of electricity generation, with coal-fired power output projected to approach 11,000 terawatt-hours by 2026. A surge in electricity demand has also slowed the transition from coal to renewable energy sources.

The IEA projects that coal will remain the primary source of electricity generation through 2030, as no alternative energy source is currently capable of replacing it on a comparable scale.

Long-standing conflicts in the Middle East have further bolstered the outlook for coal demand, as they have tightened global supplies of liquefied natural gas (LNG) and driven up energy prices.

In India, reports indicate that 45 coal-fired power plants are facing critically low coal inventory levels. This situation arises as a strong El Niño phenomenon drives up electricity demand, while monsoon rains disrupt coal supplies.

In August, Coal India Limited—the state-owned coal producer—saw its output fall by 5.7% year-on-year to 47.5 million tonnes. For the April–August period of the current fiscal year, the company’s cumulative production totaled 267.5 million tonnes, a year-on-year decline of 4.5%.

Coal remains India's primary source of electricity. In the first quarter of the fiscal year (April–June), power generation from hard coal and lignite plants accounted for 69.54% of the country's total electricity supply.

India's Power Plant Coal Stocks Drop to Four-Year Low

According to reports from foreign media on August 28, coal inventories at India's coal-fired power plants have fallen to their lowest level of the year. As the country navigates the monsoon season, the buffer stocks available to these plants are becoming increasingly strained.

Data from India's Central Electricity Authority (CEA) indicates that as of August 24, coal-fired power plants held approximately 28.36 million tonnes of coal—enough for about 9.7 days of consumption—whereas the recommended inventory level is 19.4 days. In other words, current stocks represent only about half of the prescribed supply level.

The season itself raises further concerns, as India is currently in the midst of the June–September monsoon period. Heavy rainfall can disrupt mining operations, coal transport, and rail traffic, potentially curtailing supplies to power plants—a critical time when thermal power generation remains essential to meeting electricity demand.

Historical data comparisons reveal a significant drop in power plant coal inventories this year. The total stock of 28.36 million tonnes recorded on August 24 is the lowest in four years, sitting just slightly above the 28.11 million tonnes recorded in 2022. By the same date in 2023, stocks had risen to 29.55 million tonnes; they increased to 37.52 million tonnes in 2024 and climbed sharply to 48.18 million tonnes in 2025.

The number of days of power generation that existing stocks can support has also declined sharply. Current supplies are estimated to cover 9.7 days of requirements, compared to 10.8 days during the same period in 2022, 11.2 days in 2023, 13.8 days in 2024, and 17 days in 2025.

Of particular note is that thermal power generation has remained high even as coal supplies tighten. Strong electricity demand and weaker hydropower output this year have increased the need for coal-fired power generation. Although India is rapidly expanding its renewable energy capacity, coal remains the backbone of its power system; when renewable energy output fluctuates, only thermal power plants can provide reliable electricity.

Indonesian Coal Exports Continued to Decline in July

Latest statistics from Statistics Indonesia (BPS) show that Indonesia's cumulative coal exports from January to July 2026 totaled 270.583 million tonnes, a year-on-year decrease of 3.7% (or 10.3128 million tonnes) from the 280.8958 million tonnes recorded during the same period last year. Specifically, coal exports under Customs Code 2701 amounted to 201.47 million tonnes, down 6.2% year-on-year from 214.71 million tonnes.

In July, Indonesian coal exports fell both year-on-year and month-on-month; exports for the month totaled 38.9351 million tonnes, a decrease of 6.6% year-on-year and 2.8% month-on-month. (China Coal Economic Research Association)

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