Indonesia's thermal coal exports hit three-year low amid declining demand from China and India

This decline has significantly impacted global coal exports, potentially leading to the first annual decrease in Indonesian coal shipments since 2020.

Over the first quarter of 2025, coal-fired electricity production across Asia was down 3 per cent from the same months in 2024, data from think tank Ember shows.
However, the weak state of China's industrial economy - which has direct links to trade partners across the region - has also likely played a role in curbing Asia's overall coal use. Weaker Chinese activity throughout its construction sector and heavy industries will have had knock-on effects along its supply chains, which span borders and will have chilled energy-intensive activity in neighbouring nations as well. And with most of Asia's manufacturing sector now set to take a hit from the new higher trade tariffs set by U.S. President Donald Trump, overall industrial activity - and demand for coal power - could decline further in the months ahead. That said, if Asian economies opt to deploy stimulus measures designed to counter the impact of U.S. trade barriers, then greater industrial energy use could result, which could spark a rebound in coal imports and consumption. Not all major coal users have curbed coal consumption and imports so far this year. Vietnam and Bangladesh both lifted Indonesian coal imports to record highs during January to April, and look set to continue boosting coal use and imports going forward to feed their fast-growing energy systems. Other, more developed economies have also stepped up coal imports, in part due to a sharp run-up this year in the price of natural gas, which is another major source of power production in many areas. Spain, Italy, Romania and New Zealand all registered year-over-year rises in imports of Indonesian coal, and higher coal-fired power output. Even the United States has boosted coal-fired electricity output this year by over 20 per cent from year-before levels, Ember data shows. That offers little help to Indonesian coal exporters, however, as the U.S. is a fellow coal exporter. And with China and India both likely to remain only modest coal importers over the coming months, the recent weak pace of Indonesia's coal shipments looks set to be maintained for the near term at least. That in turn raises the prospect of a rare full-year contraction in Indonesia's coal shipments, and a possible peak in global coal export flows.
- Published On May 10, 2025 at 11:03 AM IST
energy.economictimes.indiatimes