China’s Indonesian coal imports hit record amid power crisis, Southeast Asian nation now biggest supplier
- Cargoes of coking, thermal and brown coal from Indonesia surpassed 21 million tonnes in September, from just over 17 million tonnes in August
- Buyers have been forced to tap other suppliers of the fuel to replace Australian exports banned almost a year ago
Indonesia is now overwhelmingly China’s biggest overseas supplier of coal, with shipments hitting a record last month after Beijing loosened curbs on imports to tackle its power crisis.
Cargoes of coking, thermal and brown coal from the Southeast Asian nation surpassed 21 million tonnes in September, from just over 17 million tonnes in August, and now account for about two-thirds of China’s total imports, according to customs data.
Indonesia provides a lot of low-grade brown coal, which has a price advantage but is both less efficient and worse for the climate.
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Indonesia should continue to ship more to China as demand weakens from another key market, India, according to Bloomberg Intelligence analyst Michelle Leung.
However, supply could still be prone to hitches. In recent months, Indonesia has told producers to prioritise domestic supplies, while mining activity has been constrained by flooding and the pandemic.
The price of one Indonesian variety of the lower-quality fuel hit US$160 to US$170 a tonnes this week, according to traders.
That is well up from US$110 to US$120 earlier this month. Supplies from the Southeast Asian nation remain tight due to weather-related disruptions, with sellers playing catch-up to meet prior commitments to buyers, the traders said.