Indonesian coal exports fell in January 2026 due to policy uncertainties, market expectations, adverse weather, and a high base in December, marking declines compared to both the previous month and January 2025.

According to the Badan Pusat Statistik (BPS) Indonesia, coal exports in the month totaled 39.56 million tonnes, down 6.39% year on year (YoY) and 22.73% month on month (MoM). That was the lowest export level in the past six months.

The export value dropped 17.66% YoY to $2.25 billion in January, down 24.77% MoM, showed the BPS data. The average export price decreased 12.04% YoY and 2.64% MoM to $56.89/t during the period.

Tight supply in Indonesia was the primary driver behind the decline. Government policy uncertainties, particularly regarding the 2026 Work Plans and Budgets (RKAB), disrupted local miners' production and sales. The delayed approval process for mining permits, especially for small- and medium-sized mines, hindered their ability to organize production and exports in the new year.

Furthermore, the Indonesian government postponed the implementation of coal export duties, originally scheduled for January 1, 2026, due to delays in mechanism rollout. However, the duties will be retroactive starting January, adding cost burden to miners and exacerbating export uncertainties. As a result, many miners shifted their focus from active production and sales to awaiting clearer policies and securing production quotas.

This policy indecision led miners to hold back on sales, further tightening spot availability. Additionally, the Ministry of Energy and Mineral Resources (ESDM) had initially aimed to cap 2026 RKAB production at around 600 million tonnes, down significantly from 2025's output of approximately 790 million tonnes, raising concerns about sustained supply tightness.

Strong rainfall in key mining regions such as South Sumatra and Kalimantan disrupted open-pit mining operations and inland logistics. In South Sumatra, local authorities imposed a ban on coal trucks using public roads, further hindering logistics. While barge transportation resumed in mid-January, full recovery took additional time.

Major buyers such as China remained reluctant to accept high-priced Indonesian coal due to sluggish domestic demand and the upcoming Chinese New Year, resulting in sparse transactions. This, coupled with hesitation from downstream buyers over high offers, contributed to subdued trading activity.

By coal type, Indonesia exported 24.42 million tonnes of other coal, down 7.9% YoY and 16.02% MoM, accounting for 61.71% of total exports. Exports of lignite coal were 10.03 million tonnes, down 7.42% YoY and 32.81% MoM, making up 25.34% of the total.

Exports of other bituminous coal amounted to 3.05 million tonnes, down 8.66% YoY and 35.13% MoM, contributing 7.72% to the total coal exports. Coking coal exports stood at 2.05 million tonnes, up 30.26% YoY but down 26.04% MoM, representing 5.19% of total exports.

Exports of thermal coal (other coal, other bituminous coal, and lignite coal) totaled 37.5 million tonnes, falling 7.83% YoY and 22.1% MoM, a share of 94.77% against the total, while export value fell 20.12% YoY to $2.04 billion, down 23.5% MoM.

Indonesia's top five export destinations in January were China, India, the Philippines, South Korea, and Vietnam, which together accounted for 78.49% of the total exports for the month. Four of the top ten buyers in the month were southeastern countries.

China remained the largest buyer in the month, receiving 16.31 million tonnes, down 2% YoY and 36.1% MoM, representing 41.23% of total exports. The export value to China was $768 million, sliding 10.84% YoY and 40.31% MoM.

Exports to India amounted to 7.05 million tonnes, down 16.42% YoY and 4.36% MoM, making up 17.82% of total exports. Exports to the Philippines increased 1.36% YoY yet dropped 2.36% MoM to 3.17 million tonnes, accounting for 8.01% of total exports.

Shipments to South Korea declined 28.17% YoY and 6.24% MoM to 2.37 million tonnes. Exports to Vietnam were 2.15 million tonnes, rising 23.23% YoY yet dipping 0.63% MoM.

In January, exports to Southeast Asian nations totaled 8.74 million tonnes, descending 2.56% YoY and 5.28% MoM, representing 22.1% of Indonesia's overall exports. Indonesia's coal exports to Europe were 106,500 tonnes, plunging 54.49% YoY and 55.14% MoM.

Looking ahead, Indonesia's coal exports are expected to soften further. The pending RKAB approval process, along with uncertainties surrounding export duties, will continue restricting miners' normal production, prompting them to hold back on sales. Additionally, coal production and shipments are expected to slow further during the February-March Ramadan period. Despite relatively weak demand from China, the ongoing supply tightness, coupled with the Middle East conflict will provide support to the seaborne coal market in the near term.