With China's appetite softening and Indonesia's steel industry modernizing, Russian PCI coal suppliers doubled down on their efforts in the Indonesian market amid rising demand from local steelmakers, albeit at lower prices, Kommersant reported.

In early November, an Indonesian steel producer secured a Panamax cargo of Russian PCI coal at $142/t CFR, according to NEFT Research. Two additional deals followed at slightly lower prices, ranging $139.5-140/t.

Despite being the world's largest exporter of thermal coal, Indonesia relies on imports to meet its met coal needs. From 2020 to 2024, such imports more than doubled to 21 million tonnes, with Australia remaining the main supplier, according to Ember.

However, weather-related disruptions, domestic logistical bottlenecks, and rising quality requirements strained local supply chains, creating an opening for Russia.

Russian firms offer favorable terms and pricing compared to some traditional suppliers, buoying purchases from Indonesian end users, said Alexander Kotov at NEFT Research. As Indonesia's steelmaking capacity expands and modernizes, Russia's PCI exports to the region are likely to grow, provided they remain logistically and economically competitive.

The strategic pivot toward Southeast Asia was also partly due to waning demand in China. A recovery in Chinese domestic supply, declining pig iron output, and falling profit margins among steel producers weakened demand. By mid-November, Russian premium coking coal prices in China slipped to $209/t CFR, while PCI coal fell to $132/t, showed data from NEFT Research.

Another analyst attributed the increase in Russian coal shipments to Indonesia partly to seasonal rainfall that hampered local production and transport. Meanwhile, China's new sulfur content restrictions in nickel pig iron production have rendered some Indonesian coal unsuitable, indirectly boosting demand for Russian coal with compliant specifications.

Yet the outlook remains mixed. While Russia may maintain a foothold in Indonesia, price pressure and logistical risks persist. Oleg Abelev of Ricom-Trust noted that structural demand for met coal in Indonesia is real, but pricing power is constrained.

Global met coal prices are unlikely to rebound before mid-2026, said another analyst, noting no large-scale restrictions on steel output in China.