Indonesia's coal exports fell for a third consecutive month in August 2026, declining over 6% from the previous month, with the year-on-year drop widening sharply and volumes hitting a five-year low for the period.

Kpler vessel-tracking data showed Indonesia's seaborne coal exports totaled 36.10 million tonnes in August, down 23.34% from 47.09 million tonnes a year earlier and 6.54% lower than the 38.62 million tonnes shipped in July. The year-on-year decline widened from the 6.87% contraction recorded in the previous month.

Beyond policy uncertainty, August supply was also constrained by low river water levels caused by drought. Water levels on the Barito River fell to 3-4 meters from the usual 8-18 meters, forcing barges to cut loadings by half. Some river sections became unnavigable, prompting several producers to declare force majeure.

The situation compounded output uncertainties stemming from earlier this year, when Indonesian authorities cut the national coal production target to 600 million tonnes from 817.5 million tonnes, revoked up to 80% of production quotas under some mine work plans and budgets (RKAB), and raised domestic market obligation (DMO) supply ratios.

Despite these measures, output from major producers remained largely stable. With production target restrictions eased, Indonesia's largest coal producer Bumi Resources raised its 2026 sales target to 82-84 million tonnes, with output up 7% year on year.

August exports to Asia totaled 35.83 million tonnes, down 23.66% year on year and 6.59% month on month, accounting for 99.3% of total exports, slightly below 99.7% in July.

By destination, China remained the largest buyer, taking 14.47 million tonnes in August, down 30.78% year on year but up 1.26% from a month earlier.

Exports to India reached 7.10 million tonnes, down 15.83% year on year but up 12.01% month on month. Shipments to the Philippines totaled 2.69 million tonnes, down 18.1% year on year and 26.38% month on month.

The Philippines relies heavily on Indonesian coal imports. Its coal-fired power generation has remained stable year on year so far in 2026, sustaining steady albeit modest import demand.

Exports to Malaysia stood at 2.20 million tonnes in August, up 28.52% year on year and 4.91% month on month. Shipments to Vietnam totaled 2.07 million tonnes, up 28.6% year on year but down 21.58% from the previous month.

Cumulative January-August seaborne coal exports reached 302 million tonnes, down 4.51% year on year. Of that, shipments to mainland China totaled 116 million tonnes, down 2.73%.

Kpler expects Indonesia's coal market to remain firm for the rest of the year despite weakening demand from its largest export destination, with supply-side constraints continuing to underpin prices.