Coal news and updates

Indonesia's coal ban sends prices soaring, other exporters fail to step up: Russell

Indonesia's short-lived ban on exporting coal has sent ructions through the seaborne market for the fuel in Asia, with the fallout likely to last beyond the initial shortage of available cargoes.

The short-term impact of the sudden ban announced on Jan. 1 by the world's largest exporter of the polluting fuel was to send prices for cargoes from other major shippers soaring back toward last year's record highs.

The longer-term impact is that the key planks of being cheap and reliable, promoted by the coal industry in its battle for survival against cleaner energy alternatives, are seriously undermined.

Indonesia's government imposed a month-long ban on Jan. 1 on coal exports in a bid to ensure sufficient domestic supplies, but by Jan. 20 restrictions were being eased with 139 companies allowed to ship the fuel overseas.

However, it's likely that the seaborne market will be short of several million tonnes in January and February as it will take time for Indonesia's shipments to return to more normal levels.

The supply crunch is being exacerbated by the inability of some major exporters, such as Russia and South Africa, to boost their shipments, with only Australia likely to ship more coal in January than it did in December.

Indonesia is on track to export 17.7 million tonnes of coal in January, according to vessel-tracking and port data compiled by commodity consultants Kpler.

This will be some 43% below December's 31.29 million tonnes and the weakest month since Kpler starting compiling data in January 2017.

Australia's exports of all grades of coal are expected by Kpler to be around 31.29 million tonnes in January, up from December's 29.74 million and the highest since September last year.

But much of the gain in Australia's exports in January is likely to be for coking coal used to make steel, rather than thermal coal for power plants.

Australia's thermal coal shipments are likely to be around 17.22 million tonnes in January, up just 380,000 tonnes from December's 16.84 million, according to Kpler.

Russia's coal exports are estimated at 9.70 million tonnes in January, down from 13.23 million in December, while South Africa is forecast to export 4.5 million tonnes in January, down from 5.43 million the previous month.

The shipping data makes it clear that coal supply issues extend beyond Indonesia and the other major exporters, Australia excepted, have been unable to take advantage of the shortage created by Jakarta's ban.