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Indonesia’s coal export ban will keep upward pressure on prices – Japan utility lobby

Although Indonesia has partially relaxed its ban on exporting coal, the upward pressure on thermal coal prices will continue as it is not yet known when the situation will return to normal, the chief said on Friday. from the Japanese Electric Utility Lobby.

The world’s largest thermal coal exporter introduced an export ban on January 1 as stocks at local power plants were at extremely low levels.

But he said Thursday he would allow the departure of 37 ships loaded with coal, the strongest sign to date that the country is relaxing its shipping ban.

“As Indonesia is a major exporter of coal, there will be some upward pressure on coal prices, although this will depend on how quickly things get back to normal,” Federation President Kazuhiro Ikebe of Japan Electricity Companies (FEPC), told reporters on Friday.

Monthly ICE Newcastle coal futures are at their highest level since October, up more than $ 50 a tonne since the start of 2022.

Ikebe, also chairman of Kyushu Electric Power, said his company is not currently buying coal from Indonesia, but is trying to expand the types of coal it can use to ensure a stable supply in the event. where other countries would implement similar measures.

“Some types of coals cannot be used or are not suitable for our boilers, but we are trying to expand the choice of coals that can be used by mixing different types,” he said.

Okinawa Electric Power purchases about half of its thermal coal from Indonesia.

“We were really worried because our cargo was stranded due to the ban,” Hiroyuki Motonaga, president of Okinawa Electric, said at another press conference, although he added that the cargo had now left. indonesia.

“If the ban is extended, we will have to consider running other power plants or sourcing coal from other countries like Australia,” he said.