Bad</strong news is approaching Indonesia’s coal sector. According to commodity analysis firm, Kpler, our thermal coal exports fell by 20 million tons to 150 million tons during 4M 2025, which means a significant decline of -12% year-on-year (YoY). This is the lowest export volume in the last three years, and the biggest decline since 2017. How did you get here?
Causes of the Decline in Indonesia’s Exports
Our coal exports have been seriously affected by weakening demand from China and India. Both countries are experiencing an increase in domestic coal production. Based on records, exports to China decreased by 14 million tons or equivalent to -20% YoY, while exports to India also shrank by 6 million tons or -15% YoY. Practically, our export market is squeezed, in the midst of their efforts to increase domestic supply.
Shocking Data
If we look at official data from the Ministry of Energy and Mineral Resources, the amount of Indonesia’s coal exports from the beginning of the year to May 16, 2025 has only reached ~131 million tons, or only meets around 26.2% of the 2025 export target set at the level of 500 million tons. Compare that to 2024 where our exports will reach ~441 million tons, meeting 90% of the target at the level of 490 million tons. Very striking, right?
Declining Electricity Demand
In addition, electricity demand contributed to a decline in coal exports. A study from think tank Ember revealed that coal-based electricity production across Asia fell by -3% YoY during the first quarter of 2025, due to the shift to clean energy sources and sluggish industrial conditions in China.
Performance of Coal Issuers
From the perspective of issuers, there has been a decline in sales in several leading coal issuers such as United Tractors ($UNTR), Bumi Resources ($BUMI), and Harum Energy ($HRUM). However, there are issuers such as Adaro Andalan Indonesia ($AADI) and Bukit Asam ($PTBA) that still record an increase in exports.
Declining Coal Production
In terms of production, the Ministry of Energy and Mineral Resources noted that Indonesia’s coal production in the first quarter of 2025 reached only 171 million tons, down -16.1% YoY, and only met ~23.1% of the 2025 target at the level of 740 million tons. This data is quite worrying if we hope for the growth of the coal sector this year.
Conclusion
From all the data and analysis above, it is very clear that our coal production and exports may miss the 2025 target. This is in line with the potential for several issuers not to achieve their targets related to sluggish production at the beginning of the year. We need to adapt and innovate to find new ways not to be left behind, considering that coal prices in the future are predicted to tend to be flat around 90-100 US dollars per ton. Are we ready for this reality, or will there be a brilliant move from industry players? Only time will tell.