In July, significant developments have reshaped the global coal landscape—highlighting shifting trade volumes, new export measures in Indonesia, and evolving market strategies in top-importing countries.
China Cuts Imports from Indonesia
China’s coal imports from Indonesia plunged 30% year-on-year in June, totaling 11.62 million tonnes, marking the lowest monthly level in over two years. For the first half of 2025, imports from Indonesia are down 12%, with total Indonesian shipments at 90.98 million tonnes (english.kontan.co.id). This shift illustrates China’s pivot toward higher-quality, higher-calorific coal and a ramp-up of domestic production (reuters.com).
Similarly, both China and India have been reducing their intake of Indonesian, lower-grade coal in favor of more energy-dense alternatives from Mongolia, South Africa, Kazakhstan, Australia, and other sources (reuters.com). In the broader context, Asia’s overall seaborne thermal coal imports dropped by 7% through May, with China and India cutting back 13.6% and 4.7%, respectively (reuters.com).
Indonesia Eyes New Export Levy
To bolster state revenues, Indonesia is considering an export levy on coal, to be activated when prices are high and potentially included in the 2026 budget. According to Deputy Minister Yuliot Tanjung, proceeds from booming coal prices should benefit the state while safeguarding businesses during price slumps (news.bloombergtax.com). This policy would build on existing production royalties, leading to a new revenue stream, but could also introduce added costs and refinancing risks for mining companies like PT Indika Energy and PT Medco (businessmirror.com.ph).
Global Export & Market Dynamics
– Indonesia’s coal exports between January and May dropped about 12% year-on-year to 188 million tonnes, their lowest first-five-month total since 2022 (reuters.com).
– To compensate, traders reduced prices to four-year lows, intensifying competition among exporters—including Australia, Colombia, South Africa, and Russia (reuters.com).
– This price decline has ripple effects: it undermines gas-fired power economics in Asia, potentially stalling investment in LNG and reinforcing coal’s dominance in electricity generation (reuters.com).
Shift to Higher-Grade Coal
The ongoing trend for higher-calorific-value coal imports is reshaping international coal markets. China and India, driven by a cost-efficiency calculus, increasingly import premium-grade coal—often yielding 1.2 to 1.5 times more energy per ton—thus squeezing demand for Indonesian low-grade coal (reuters.com).
Outlook
Indonesia’s proposed export levy is a clear response to market volatility and shifting global demand. While it may help stabilize state income, it adds strain to miners already facing declining exports. Meanwhile, China and India’s pivot to higher-quality coal sources underlines a structural shift in demand, forcing Indonesia to explore domestic alternatives, diversify its export destinations, and adjust pricing strategies to stay globally competitive.
Compiled from Bloomberg (via Bloomberg Tax/China Daily HK/BusinessMirror) (news.bloombergtax.com, chinadailyhk.com, businessmirror.com.ph); Reuters (reuters.com); The Economic Times/ETEnergyworld (energy.economictimes.indiatimes.com); MarketScreener (marketscreener.com); and Kontan (english.kontan.co.id).
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