Indonesia's Coal Exports Sink 23% as Global Demand Heads for a Record
Indonesia, the world’s largest thermal coal exporter, saw shipments fall 23% year-on-year in August and 6.54% from July, recording its weakest August exports in five years, according to the Jakarta Post. The drop comes amid government production quota changes, policy uncertainty over mining and exports, and logistical disruption from a strong El Niño reducing river water levels.
Why It Matters
The decline is notable because it coincides with rising global coal demand — driven by LNG supply disruptions tied to the Middle East crisis — which is pushing coal consumption toward a potential record high even as Indonesia’s output and exports are constrained. Those constraints could tighten supply from the world’s largest exporter while international buyers become more cautious.
Key Facts
- August export change (year-on-year): -23%
- August export change (month-on-month): -6.54%
- August exports: Lowest for the month in five years (reported by the Jakarta Post)
- Indonesia government production target (2026): 641 million tonnes
- IEA estimate for Indonesia output change (2026 vs 2025): Down more than 12 million tonnes, or about 1.5%
Indonesia’s thermal coal shipments fell sharply in August, with exports down 23% from a year earlier and 6.54% from July, marking the weakest August export level in five years, according to data cited by the Jakarta Post. Industry participants and analysts point to a mix of domestic policy shifts and environmental conditions that have constrained flows to overseas buyers. Earlier in the year the Indonesian government imposed lower production quotas on coal miners; some quotas were raised mid-year, but the adjustments left buyers uncertain about future supply. The International Energy Agency (IEA) noted that ongoing policy discussions — covering export taxes, revenue-sharing, mining permits and a potential move to centralise exports under a state-controlled entity — have added to that uncertainty. Physical logistics have also been affected. A strong El Niño has reduced rainfall and lowered river water levels, disrupting barge movements that carry coal to export ports and further limiting shipments. Traders report fewer deals as a result: Matthew Boyle, head of research at Ashon International DMCC, told Bloomberg his firm expects Indonesian coal sales to fall from about 4 million tonnes last year to around 2 million tonnes this year. Those supply-side constraints are occurring as global coal demand is rising. The IEA, in its Coal Mid-Year Update 2026, said higher LNG prices and supply disruptions linked to the Strait of Hormuz have prompted some economies to switch from gas to coal, putting global coal demand on track for a record high. The IEA also projects Indonesia’s coal output to decline by more than 12 million tonnes this year compared with 2025 and highlights the government’s lower production target of 641 million tonnes as a source of fresh uncertainty for both producers and international buyers.