Indonesia's coal exports are off to a sluggish start in 2026, with trader sources reporting restrained mine availability curbed by policy changes and uncertainties, including pending 2026 mining quotas approvals, coal transport bans on public roads in South Sumatra, and the already effective export duties despite an unfinalized rates.

Cargo-tracking data from Kpler showed the projected coal exports stood at just 35.03 million tonnes in January, marking a sharp reduction of 30.4% from a record high of 50.30 million tonnes in December 2025, notching the lowest monthly estimate since June 2025 and the second-lowest since March 2022.

As of January 16, actual exports were registered at 15.63 million tonnes, less than half of the predicted volume, Kpler's data showed, underscoring the ongoing regulatory hurdles on the world's largest thermal coal exporter.

Some sources ascribed the reduced availability from miners partly to delays in the official approval of miners' 2026 Work Plan and Budgets (RKAB), a mandatory regulatory framework that determines how much miners are allowed to produce for the year.

The delays have forced a few miners to scale back or halt activities earlier this month, as companies cannot legally proceed without official endorsement from the Ministry of Energy and Mineral Resources (ESDM). To mitigate disruptions, the ESDM has permitted miners to operate, until March 31, at up to 25% of their proposed 2026 output levels under the abolished three-year mechanism, providing a temporary lifeline for some medium-sized miners.

While some miners claim they can still dispatch cargoes under the interim 25% cap, local sources reported that a few mines, particularly smaller ones, opted to wait for official approvals before starting normal operations.

However, that is not the only reason for capped supply in the spot market. Some trader sources reported reduced supply from South Sumatra miners, following the provincial government's ban on coal transportation on public roads starting from January 1 this year. This left some small mines with a lack of infrastructure support, resulting in slashed deliveries.

The recent lifting of coal barges on the Lalan River in the province from January 15 offers some relief on local logistics pressure, but it is unable to fully solve the ongoing logistics problem faced by some mines.

Meanwhile, some miners shifted to a more cautious stance in selling cargoes following the government's mandate on coal export duties. Without a clear confirmation of the rate that will be applied, some miners opted to slash supplies.

These restrictions and uncertainties echo broader challenges in Indonesia's coal sector, which faced subdued demand from key buyers like China and India and weakened export prices.

The government has signaled further output curbs for 2026, targeting around 600 Mt in total production, down about 24% from 790 Mt in 2025 to support prices. Sxcoal earlier predicted that coal exports from the country could fall within a range of 390-400 million tonnes this year, a 18-24% reduction from the already reduced 2025 export level.

As Indonesia allows exports after meeting domestic obligations, some participants reckoned the overall exports in the following several months would be subdued, adding another layer of uncertainty. Several exporter sources disclosed significant reduction in their export plans for February and even March.

Offers for the most liquidated Indonesian 3,800 Kcal/kg NAR coal were heard firm at $50/t FOB or above, while transactions were heard at $49-49.5/t.

Utility tender prices decline

While Indonesian supply constraints were reverberating in China's import market, bidding prices to tenders for Indonesian low-CV cargoes floated by major Chinese utilities still declined.

Sxcoal's tracking data showed that bids received by utilities for 3,800 Kcal/kg NAR coal fell below 430 yuan/t on January 15, CFR China with VAT, translating to $48/t or so FOB East Kalimantan on a Panamax basis.

This could be influenced by ripple effects from China's domestic market. Both mine-mouth and portside thermal coal prices in China have shown signs of retreating approaching the end of the week. Some sellers eased pricing stance in anticipation of possibly staged price ceilings.

Chinese traders remained cautious, with some even turning slightly bearish over the near-term prices, primarily owing to a lack of demand improvement from power plants holding ample stocks.

"While firm export prices to neighboring countries and lower Indonesian output provide underlying support, bearish fundamentals continue to prevail, making it difficult for prices to gain any significant traction," said a Guangdong-based trader source.

Data showed that coal burns at power plants under six major Chinese coastal power groups, major consumers for seaborne imported cargoes, stood at 0.78 million tonnes on January 15, a 9.16% reduction from a week ago and down 5.13% and 6.53% respectively from the month-ago and the year-ago levels. The inventories could cover 17.03 days of consumption, exceeding the year-ago level.