Indonesia's coal exports notched a three-year low during the first half of 2025, snapping continued year-on-year (YoY) increases over the past two years, mainly due to reduced demand from major importers, particularly China and India.

Over the first six months, the country's coal exports dropped 9.26% YoY to 245 million tonnes, with value down 22.1% YoY to $14.75 billion, according to data from Badan Pusat Statistik (BPS) Indonesia. The average export price decreased 14.15% to $60.31/t during the period.

Ample domestic production in China and India squeezed their demand for imported cargoes. China's raw coal output grew 5.4% YoY between January and June, and India's output for FY25 rose 5% YoY to over 1 billion tonnes, reaching a historical high.

Indonesia's coal industry has struggled with supply surplus, export declines, and global demand and price softness since the start of this year, which is expected to face a 21% YoY drop in revenue for the first half year, down to $11.97 billion.

Mining giants like Adaro Energy may scale back coal output and diversify their businesses by pivoting to aluminum, renewable energy, and nickel.

Nevertheless, some other producers have been increasing investments in the coal assets, including Bayan Resources and Geo Energy Resources, which have a combined capacity expansion of 58 million tonnes per annum.

For the January to June period, Indonesia's coal production reached 371.66 million tonnes, setting a strong foundation for the annual output to exceed 700 million tonnes.

In June, Indonesia's coal exports came in at 35.65 million tonnes, down 21.44% YoY and 17.27% month on month (MoM), data showed. The monthly export figure hit its lowest since March 2022, when offtakes rebounded from low levels in January and February that were restricted by a month-long ban on coal exports.

The notable drop in the month came largely amid tepid import demand from China and India. Elevated inventories at Chinese power plants and ports, and historically high stocks at Indian utilities, curbed their appetite for Indonesian coal.

Meanwhile, falling coal prices globally made high-CV grades more cost-effective, thus leading Russian and Australian resources to expand their shares in the international market.

Indonesia's June coal exports were valued at $2.06 billion, down 34.82% YoY and 18.83% MoM. This put the average export price at $57.7/t, down 17.03% YoY and 1.88% MoM.

By coal type, Indonesia exported 23.45 million tonnes of other coal (non-coking coal), falling 11.73% YoY and 20.91% MoM, accounting for 65.8% of total exports. Exports of lignite coal were 7.11 million tonnes, a 40.71% YoY decrease and a 14.6% MoM decline, making up 19.9% of the total.

Exports of other bituminous coal amounted to 3.14 million tonnes, falling 28.96% YoY and 12.46% MoM, contributing 8.8% to the total coal exports. Coking coal exports stood at 1.96 million tonnes, down 16.51% YoY yet up 27.13% MoM, representing 5.5% of total exports.

Exports of thermal coal (other coal, other bituminous coal, and lignite coal) totaled 33.70 million tonnes, sinking 21.59% YoY and 18.92% MoM, a share of 94.5% against the total, while export value fell 34.13% YoY to $1.67 billion, down 21.8% MoM.

Indonesia's top five export destinations in June were China, India, the Philippines, South Korea, and Vietnam, which together accounted for 73.7% of the total exports for the month.

China remained the largest buyer, receiving 11.10 million tonnes, down 41.18% YoY and 17.15% MoM, representing 31.13% of total exports against May's 31.8%. The export value to China was $524 million, sliding 52.1% YoY and 20.25% MoM.

Exports to India amounted to 8.13 million tonnes, dropping 5.97% YoY and 25.12% MoM, making up 22.8% of total exports, lower than 25.2% in May. The export value to India was $392 million, down 20.22% YoY and 27.61% MoM.

Exports to the Philippines dived 26.09% YoY and 33.18% MoM to 2.93 million tonnes, accounting for 8.22% of total exports. Shipments to South Korea dropped 1.41% YoY but surged 42.57% MoM to 2.07 million tonnes, comprising 5.81% of the country's total exports. Exports to Vietnam were 2.05 million tonnes, down 29.13% YoY and 24.08% MoM.

In June, exports to Southeast Asian nations totaled 8.76 million tonnes, descending 11.72% YoY and 26.25% MoM, representing 24.6% of Indonesia's overall exports. Indonesia's coal exports to Europe were zero over the given period.

The export outlook of Indonesia remains clouded for the second half year, given sluggish demand, weak international coal prices, and fierce competition. Annual coal exports are projected to be lower than the 2024 level despite a possible pickup in July.

Under such circumstances, Indonesia needs to accelerate the exploration of emerging markets and optimize its export structure to cope with a long-term downturn.